2023–2024 Departmental Results Report – Operating context

Economic context

The Prairies economy in 2023-2024 was marked by modest economic growth in the face of continued economic challenges. Robust employment growth, declining inflationary pressures, and record crude oil output buoyed overall economic sentiments, but optimism was tempered by the impact of severe wildfires and drought on the region's agricultural sector.

In 2023, the economy experienced slower than normal economic growth. Despite a subdued outlook, the Prairies were generally expected to outperform other provinces. Although the Prairies mostly met projections, the rest of Canada defied expectations, resulting in growth levels in the Prairies in line with other Canadian provinces. Year over year real GDP growth was relatively uniform, led by Saskatchewan (1.6%), and followed by Alberta (1.5%) and Manitoba (1.3%).

The Prairies saw an increase of over 100,000 employed persons compared to the previous year. All three provinces saw growth, led by Saskatchewan (3.4%), and followed closely by Alberta (3.1%) and Manitoba (2.9%). Despite strong growth in employment, Manitoba was the only Prairies province that saw a decline in its unemployment rate, declining slightly to 4.2%. Both Alberta and Saskatchewan saw their unemployment rates increase to 6.3% and 5%, respectively.

Population growth in the Prairies continued to strengthen this year, primarily driven by international migration. Alberta led all but one Canadian provinces with the highest rate of population growth in 2023 at 3.4%, while Saskatchewan (2.0%) and Manitoba (2.3%) grew at a rate more in line with the national average.

Crude oil output reached a record 1.5 billion barrels in 2023, attributed to an increase in output in Alberta. The anticipated opening of the Trans Mountain pipeline expansion played a role in pushing Alberta’s output higher, as oil producers began to ramp up output in advance of the expansion’s operational commencement.

By mid-2023, inflation fell within the Bank of Canada’s 1%-3% target, the first time it had done so since March 2021. While it remained around the upper bound of the target range for the rest of the year, this signaled the beginning of easing inflationary pressures.

The Prairies experienced forest fires of an unprecedented scale, with more hectares of forest burned than any other year on record. This was most evident in Alberta where 2.2 million hectares burned – 63% more than the previous record set in 1981, and over 10 times the 10-year average. Saskatchewan also saw its highest number of hectares burned since 1981, while Manitoba experienced a below-average wildfire season. Wildfires continue to increase in both quantity and intensity in the Prairies, raising important questions about their future impact on the region's economic activities.

The drought that contributed to record wildfires in the region also had an impact on crop production GDP. Alberta, the province most heavily impacted by forest fires, saw the largest disruption to its crop production value added, declining nearly 14% compared to the previous year. This trend was echoed to a lesser extent in Saskatchewan which saw a 7.4% decline year over year. Manitoba’s crop production stayed relatively flat, increasing 0.4%.

PrairiesCan supports businesses

PrairiesCan supports businesses in the region through programs designed to enhance innovation, improve business competitiveness, promote the adoption of clean technologies, and foster inclusive growth. In 2023-24, the department continued to support businesses in growing, commercializing, and adopting technology. Moreover, it supported communities in developing economically as they faced on-going economic challenges, including climate uncertainty, labour market pressures, and elevated borrowing costs. Through its activities, the department strengthens and supports an innovative, competitive, and inclusive economy.