Western Economic Diversification Canada
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Operating context: conditions affecting our work

The western Canadian economy accounts for almost 40 percent of Canada’s economy and close to one third of all Canadians live in Western Canada. Due to the size of the western Canadian economy, it has a significant impact on the national economy.

The four provinces in Western Canada have had different economic performances over the last couple of years. Primarily due to lower commodity prices (crude oil in particular), Alberta, and to a lesser extent Saskatchewan, experienced economic hardships while there was moderate growth in British Columbia and Manitoba. Private sector economists expect Alberta and Saskatchewan to regain some momentum in 2017–18, but their recoveries are forecast to be modest by historical standards. The forecast for British Columbia’s economy predicts low to moderate growth in 2017–18, weighed down by the province’s cooling real estate sector. Manitoba, due to its relatively diverse economy, is expected to continue its solid economic performance, albeit at slightly slower pace than in recent years.

With forecasts of slow commodity price recovery moving forward, continued economic success will require innovative building on regional strengths. Progress is being made by Western Canada’s clean technology sector, along with other innovation clusters such as information and communication technology, natural resources, nanotechnology, aerospace, and value-added agriculture. Fostering innovation clusters represents an important opportunity to diversify and strengthen the western Canadian economy.

There is a higher proportion of high-growth small and medium-sized enterprises (SME) (10.1 percent) in Western Canada than in the rest of Canada (8.8 percent), led by Alberta and Saskatchewan.[1] The number of high-growth SMEs in Western Canada grew by 15.4 percent between 2011 and 2014. Continuing to develop firms with high-growth potential is crucial for ensuring continued success of the western Canadian economy. Key challenges for high-growth and innovative firms include: access to talent, management skills, access to capital, access to markets, and being able to take advantage of innovation ecosystems.

Nearly 60 percent of Indigenous Canadians live in Western Canada.[2] The Indigenous population is amongst the youngest and fastest growing demographic, representing the largest untapped labour force in Canada. Currently, Indigenous peoples’ labour market participation and educational attainment trail those of the non-Indigenous population. Over the next 10 years, approximately 400,000 Indigenous Canadians will reach an age to enter the labour market. In addition, Indigenous small business is growing six times faster than in the non-Indigenous market and Indigenous entrepreneurs tend to be about 10 years younger.[3] This creates an enormous potential for Indigenous business growth in Western Canada.

Women represent the majority of university graduates. However, less than a third of science, technology, engineering, and mathematics graduates are women, although this number is increasing.[4] Enhancing the participation of women in these fields would promote diversity in the workforce and help alleviate pressure related to the growing demand for skilled labour that is necessary to succeed in an increasingly innovative economy.

In addition, the integration of skilled immigrant workers also represents an important opportunity to increase labour force capacity and improve economic outcomes. Western Canada attracted 110,000 immigrants in 2015, accounting for over 40 percent of Canada’s immigration.[5] There are also barriers for firms to bring in skilled workers and managers from abroad that limit growth potential and place Western Canadian firms at a disadvantage relative to their international competitors.



Statistics Canada, Survey on Financing and Growth of Small and Medium Enterprises, 2014. This survey includes the territories with British Columbia. http://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=2941
Statistics Canada, 2011 National Household Survey, http://www12.statcan.gc.ca/census-recensement/2011/dp-pd/index-eng.cfm
Statistics Canada, Education in Canada: Attainment, Field of Study and Location of Study, 2013, http://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-012-x/99-012-x2011001-eng.cfm