Mike Holden
Director of Policy and Economics, Calgary, Canadian Manufacturers & Exporters

It’s no secret that the Alberta economy runs on oil and gas. Overshadowed by the billions of dollars of investment pouring into the energy sector, Alberta has quietly become a manufacturing leader in Canada. With $74 billion in sales last year, Alberta is the third-largest manufacturing province in the country and produces more than the other three western provinces combined. 

These sales translate into a significant economic benefit. Manufacturers directly employ 140,000 Albertans and pay $8.6 billion in wages and salaries. Outside of crude oil and natural gas, they account for 78 percent of provincial exports. The spinoff benefits are even greater. 

On top of all that, manufacturing in Alberta is growing stronger even as other parts of Canada struggle. Over the past decade, manufacturing sales in Alberta have risen by 54 percent compared to just five percent nationwide. Leading the way are refined petroleum shipments, which have grown by 142 percent. At the same time, machinery production is up 12 percent, and fabricated metal output has nearly doubled. 

Part of the bigger picture

“Over the past decade manufacturing sales in Alberta have risen by 54 percent compared to five percent nationwide.”

Not surprisingly, manufacturing in Alberta is closely tied to our resource base. Alberta manufacturers add value to our natural resources or provide materials and other inputs to support resource producers. On the downstream side, companies like Imperial Oil refine petroleum, while Nova Chemicals and others manufacture polyethylene. On the upstream side, a host of businesses, large and small, produce steel pipe, machinery, modules, and a wide range of highly advanced equipment and tools. 

Of course, not all Alberta-based manufacturers work in oil and gas. The province is home to innovative manufacturers like DIRTT and All-Weather Windows, which have developed a significant niche in environmentally-sustainable building products.

Unlocking Alberta’s potential

The opportunities for Alberta manufacturers are enormous. Canadian Manufacturers & Exporters estimated that there could be as much as $1.8 trillion in investment coming in the oil sands alone between now and 2030. That’s a staggering number. It amounts to $26 million for every Albertan every year over that period. Unfortunately, locally-based producers capture only about 14 percent of the total manufacturing sales generated by energy extraction today. Increasing that market share would have a dramatic, positive effect on the provincial economy.  

However, this is easier said than done. Alberta manufacturers face significant challenges that limit their growth potential.  Some local companies are turning down contracts because they cannot find the workers needed to do the job. Others are looking to invest more outside Alberta because of our high labour and other input costs.  Infrastructure, access to government procurement markets, unfair foreign competition, overly burdensome regulations, and the need to improve productivity and innovation are all factors that need to be addressed for Alberta to realize its full potential as a manufacturing centre. 

Seizing opportunity

The good news is that positioning Alberta manufacturers to seize these opportunities is a far more attractive challenge than trying to create the opportunities from scratch. Canadian Manufacturers & Exporters has set a goal to double Alberta’s manufacturing output and exports by 2020. This goal will not be easy to achieve, but we are committed to working with our members, governments and other supporting networks to make it happen.  Success will unlock even more of Alberta’s economic potential.