Call it sibling rivalry.
For more than a century, Canada's twin sisters of Confederation – Alberta and Saskatchewan – have always loved to compare themselves. The two became provinces on the same day in 1905, and for the first half of their lives Saskatchewan was the over-achiever. In the 1920s and 1930s, it boasted more than twice as many people as Alberta and was the preferred destination of waves of European immigrants.
By the second-half of the century, however, Alberta kicked into high gear and easily outperformed Saskatchewan in economic growth and political influence. Saskatchewan looked on with jealously of her twin who had left her in the Prairie dust.
More recently, with the nasty recession that gripped Alberta in 2015 and 2016, the tables have turned. Alberta is once again looking at her sister with some envy; there's a notion that Saskatchewan is outperforming her. Saskatchewan's current unemployment rate of 6.4 per cent is much lower than Alberta's 8.8 per cent. And unlike Alberta, Saskatchewan has not recently changed its provincial government. Some in Alberta are crediting the small "c" conservative policies of the Brad Wall government for Saskatchewan's stronger economic performance.
But is it true? Is Saskatchewan's economy actually outperforming Alberta's? A closer look at the data would suggest that it is not – at least not with respect to jobs. Employment in both provinces has fallen over the course of the past few years by the same amount.
The graph below shows the annual year-over-year per-cent change in total employment. Because monthly data can jump up and down erratically, the data are smoothed using a 12-month trend line. This shows how closely the labour markets in both provinces have moved.
Back in 2012 when Alberta and Saskatchewan were enjoying a petroleum-induced boom, employment was growing steadily by about 3 per cent annually – more than twice the national average. But even before oil prices started to drop in mid-2014, job growth in Saskatchewan started to stall. Alberta's, on the other hand, remained solid until the end of 2015, at which point it started to drop steeply.
From the record-high level of employment a few years ago to January of this year, both provinces have seen precisely the same drop of 1.9 per cent. That fact runs counter to the narrative that Saskatchewan's job market has fared any better than Alberta's.
Given this, how do the jobless statistics make sense? If both provinces have seen employment shrink by precisely the same percentage, why is Alberta's 8.8-per-cent unemployment rate nearly a third higher than Saskatchewan's?
The answer to that lies in the size of the labour force in each province – and the fact that workers continue to move from Saskatchewan to Alberta. Over the past four years, Saskatchewan's labour force (i.e., the pool of adults working or looking for work) grew by less than 1.3 per cent annually, while Alberta's expanded by 2 per cent. And between October of 2016 and January of this year, Saskatchewan's labour force has actually fallen, while Alberta's continues to grow. It is the growing labour force – not job loss – that has pushed Alberta's unemployment rate to close to double digits.
Even more contrary to the belief that Saskatchewan is the star performer, Alberta still enjoys a net positive inflow of migration from Saskatchewan. It has averaged a net gain of about 600 people each quarter over the past eight quarters (roughly the period of recession). This isn't an enormous gain, particularly compared to the tidal wave of inter-provincial migration that has traditionally flowed from Saskatchewan to Alberta. But it is still positive.
Many sisters love to compete, perhaps even more so when they are twins. But in terms of employment in Alberta and Saskatchewan, there's more comparison than contrast. Both provinces have been hit by precisely the same amount. Alberta need not look east across the border with jealously.
But if Alberta looked west across its other border to the job market in British Columbia … now there's some serious fodder for rivalry!
Todd Hirsch is the Calgary-based chief economist of ATB Financial and author of The Boiling Frog Dilemma: Saving Canada from Economic Decline.
Todd Hirsch