This is the first in a series of Briefing Notes on the State of Alberta’s Well-being (past and present) using Alberta Genuine Progress Indicators that covers the period 1960 to 2020.
Alberta’s has been dependent on world oil prices since the early 1970s when the OPEC oil crisis increased the value and importance of Alberta’s vast supply of oil and natural gas. With the world’s third-largest oil reserves found in the oilsands in northeastern Alberta, what is the relationship between world prices and Alberta’s economic and societal well-being?
The Alberta GPI well-being indicators track over 70 economic, social, health and environmental well-being conditions and trends. These indicators include GDP per capita, disposable household income, weekly wages, household debt, life expectancy, employment rates, government spending, and some subjective well-being indicators such as belonging to the community and life satisfaction.
How are these indicators related to changes in world oil prices?
Examining the statistical relation between economic and health well-being indicators for Alberta and world oil prices (1970-2020) the following is a ranking of strength of relationship between GDP per capita and oil prices:
1. Personal income taxes per capita
2. Household disposable income per capita
4. Alberta Government spending per capita
5. Average weekly wages
6. Retail sales per capita
7. Household debt
8. Employment rate
9. Perceived life stress
The following well-being indicators were the most negatively impacted by changes in world oil prices (these indicators fell as oil prices rose or increased as oil prices fell):
1. Sense of belonging
2. Poverty rate
The visual relationship between Alberta’s GDP per capita, oil prices and Alberta Government spending per capita is shown in this graph.