On May 23, ATB hosted its third annual Business Summit in Edmonton. Business leaders, entrepreneurs and members of the community gathered as experts discussed key themes impacting change across the province. 

Easing inflation rates and potential interest rate cuts was on the mind of many of those in attendance. Mark Parsons, ATB VP and Chief Economist, noted “the stage is set” for a summer rate cut. However, the story that Alberta is used to, characterised by a heavier reliance on rising oil and gas investment, will look different in 2024 as growth broadens across industries and strong population growth continues.

Interprovincial immigration to Alberta was at an all-time high last year and inflows are expected to continue for the foreseeable future. As ATB’s industry experts point out, this in-migration will catalyse home building activity and help ease hiring challenges, but will also strain existing infrastructure and housing supply. Other growth areas include food manufacturing, technology and emissions reduction.

New young households mean new skill sets, which means new opportunities to build on existing strengths in the province’s core industries—something ATB experts are pursuing alongside Canadian entrepreneurs waiting for the capital to secure their expansions and equity investments. 

The Numbers Game

Alberta is no stranger to fluxes in population with a history of new workers arriving to Alberta during booming periods of oil and gas activity. But the new face of our population boom isn’t as tied to the O&G sector as it once was. The latest wave of migration from other provinces reflects broader-based growth and in large part driven by the hunt for more affordable housing —something Parsons tackles in a new study, “Chasing affordability:  The return of interprovincial migration to Alberta.”

Customers aren’t the only ones seeking economic certainty. For Governor Tiff Macklem and the Bank of Canada, the need for “more data'' that proves inflation is cooling has resulted in a cautious approach to future rate cuts. For Canadian households, factors like inflation, mortgage resets and a cooling labour market have weighed on consumer spending. This contrasts to our American neighbours, who have proven to be far more resilient to interest rate increases. Longer-term, Canada will need to shore up its lagging productivity. Parsons notes that our current level of business investment rate is lower than 10 years ago.

Perspectives From ATB Business Industry Leaders

Trina Holland, AVP, Diversified Industries and Energy Services, opened a panel made up of ATB industry leaders with commentary on the opportunities that strong population growth provides. An influx of highly skilled labourers has provided invaluable momentum for growth in many different sectors in Alberta, especially in the tech industry. When coupled with barriers to securing capital slowly but steadily diminishing, there is more opportunity than ever for large, diversified projects to launch.

While the less than seasonable weather has disappointed some people, Jon Neutens, AVP, Agribusiness, couldn’t be more pleased. “Drought contributes directly to GDP loss,” he explained. While more rain is needed to fill reservoirs and promote runoff into irrigation districts, the 2024 season is off to a good start—both for grain and livestock producers forced to downsize operations amidst years of drought conditions. These shifts, coupled with upticks in smart farming and agriculture-focused enrollments in post-secondary institutions, suggests that both Alberta’s farming operations and value-add operations are poised for a bright future—especially if policy provides an opportunity to reimburse farming operations that have already invested in regenerative techniques.

Hope Builds in Rural and Urban Markets

Building on Neutens’ optimism was Jenn Craig, AVP, Rural Markets. From the completion and opening of the Sheldon Kennedy Centre of Excellence to the expansion of Red Deer Polytechnic, there is plenty of proof that the rural economy is lighting up with activity. With infrastructure projects such as twinning Highway 40 and Dow’s Fort Saskatchewan Path2Zero receiving federal and provincial support, rural clients' new challenge is talent acquisition and retention. Strategies such as sponsored education and vacations for tenured staff were among the “creative solutions'' Craig alluded to as she painted a picture of an optimistic rural Alberta.

Rounding the panel was Neil Ternovatsky, AVP, Real Estate. Immediate credit was given to Albertan developers and builders tackling the challenge of housing the record number of migrants to Alberta. He notes that the multi-unit rental space in Calgary is seeing the most activity, though permits and housing starts are up in both Edmonton and Calgary.

All speakers returned to the most pressing challenge, one that’s especially being seen in the construction industry: skilled labour shortages. Criticisms have been made concerning how labour shortages coupled with mega projects divert a limited talent pool away from the pressing need for residential build starts. Tenovatsky notes that acute skills shortages persist in specific industries despite Alberta’s higher-than-national-average unemployment rate of 7%.

A picture of our province shows us as young, entrepreneurial and skilled—three traits needed for long-term economic growth and stability. With house prices still within reach, Alberta is attracting and retaining more skilled talent than ever. As Mark Parsons alluded, there is an upside to the immigration data. He says, “Alberta possesses a demographic that other provinces are envious of.”

Oscar Munoz Navigates the Skies of Leadership and Innovation

To close the summit, Dianne Buckner of CBC’s Dragons’ Den, led a thoughtful conversation with Oscar Munoz, the current Board Chair and former CEO of United Airlines.

As Munoz recalls his first few weeks with United Airlines, he noted his work was cut out for him. From his earliest interactions, he describes much of the frontline team as “disillusioned, disengaged and disenfranchised.” He doesn’t have to look far to see this same attitude in other businesses, leading him to a crucial detail of his philosophy on leadership.

Communication with your teams is only worthwhile when done honestly and earnestly. Honesty, though, doesn’t begin with going out and shaking hands. He says, “it begins with a conversation with yourself.”

He asks, “What are your strengths? What are your weaknesses? And most importantly, who are you when no one is looking?” The answers here may be ugly, and they may challenge us. They may even sound completely different from the answers we give others when we want to project our competencies. Nonetheless, Munoz believes these answers are instrumental in leading and listening genuinely.

He went on to discuss a challenge that every entrepreneur and their staff share–how technology like AI will integrate with everyday operations. He advises reminding staff members how the technology will improve their working conditions and make their lives easier. 

“Personalization,” he says, “should be the goal of your technology investments.” For United Airlines, this came down to services like check-in and baggage tracking that eliminated the need for extensive phone calls and customer effort. For his employees, this meant fewer hours dealing with menial tasks and more time to focus on streamlining other areas of the customer experience.

He notes that data should be the focus for business owners who want personalised insights into their operations. “Embrace tech, or it will disrupt you.” At ATB, President & CEO Curtis Stange recounts how advances in machine learning were leveraged for large-scale models, such as connecting CERB-eligible businesses with funding and financing strategies throughout and following the pandemic.

Agility and timely insights allow for quick responses to market conditions—something Munoz learned about quickly as the COVID-19 pandemic shut down air travel and led to a $465 million daily cash burn. With the right data and extrapolations in place for a worst-case scenario, Munoz advised United Airlines through a $1 billion wager (notably, maintaining a fleet of grounded wide-bodied aircraft at exorbitant cost) so that United Airlines was poised to meet travel demand as numbers rebounded.

As he puts it, “hope isn’t a strategy, but denial isn’t either.” Planning doesn’t cost you anything, but the results of failing to do so might cost you everything. In the context of AI disruption, commercial real estate and addressing labour shortages in the province, his reflection on confidence and timely action rings especially true.

Concluding Remarks

The ATB Business Summit 2024 concluded with a reflection on the work our clients have done and the long road ahead. The innovation, resilience and courage of Alberta’s business owners demonstrate that the grit our province is known for is alive and well. Diversification of immigration and investments, offering the potential for a transitioning economy and lifestyles that will attract generations worth of talent across all sectors.

With cooling inflation, increasing access to capital, economic strength across a number of sectors and a growing population of skilled workers, Alberta is poised to craft a new identity all on its own. A shift in the  economic picture isn’t just a dream for ATB and our clients—it’s being brought to life before everyone’s eyes.