Economic Overview

As Canada's development agency for the western provinces, Western Economic Diversification Canada (WD) strives to develop and diversify the regional economy. WD invests in projects and activities that help improve productivity and competitiveness through the development, adoption and commercialization of new technologies and business processes. WD also supports growing value-added production and access to international markets.

Western economy — Western Canada contributes nearly 38 percent of Canada's real gross domestic product (GDP). Its GDP per capita was $56,000 in 2017, 18 percent higher than the national average.Footnote 1

Small businesses — Western Canada is home to 427,000 active small and medium-size enterprises (SMEs), employing over 3.4 million people.Footnote 2

Trade — Western Canada contributes 37 percent of Canada's exports, a disproportionately large amount compared to its share of the national population.

Labour — Western Canada is home to 6 million workers, and has the highest rate of labour-force participation of any region in Canada (68%).

Indigenous peoples — Over half of Canada's Indigenous population live in the western provinces.

Geography — Western Canada consists of the country's four westernmost provinces: British Columbia, Alberta, Saskatchewan, and Manitoba. Approximately 11.1 million people, roughly 32 percent of Canadians, call Western Canada home.Footnote 3


Western economy

In 2017, the west was the fastest-growing region of Canada, led by British Columbia and Alberta. GDP growth across Canada is expected to slow down in 2018 and 2019, but Western Canada will likely still outpace the national average.Footnote 4

British Columbia

BC had the second-fastest growing provincial economy in 2017 (+3.7%), sustained by strong real estate, finance, and media sectors in Vancouver. Growth is expected to slow to 2.1 percent in 2018 and 2019, but still leading most other provinces. BC has diverse strengths in natural resources, manufacturing, and service industries, making it resilient to economic downturns.

 

Pie chart: British Columbia

 

Pie chart: British Columbia

Real estate rental and leasing is the largest contributing sector to the economy in British Columbia, accounting for 18% of GDP.

Sector Contribution to GDP (%)
Real estate and rental and leasing 18%
Construction 9%
Manufacturing 7%
Health care and social assistance 7%
Other 59%

Alberta

Alberta's economy outgrew every other Canadian province in 2017 (+4.6%), as it recovered from a two-year-long recession in 2015 and 2016. Growth is expected to slow to 1.9 percent in 2018, which would still be the second-highest in Western Canada. Alberta's economy has grown more diverse in response to low oil prices, but remains dependent on the energy sector for capital investment.

 

Pie chart: Alberta

 

Pie chart: Alberta

Mining, quarrying, and oil and gas extraction is the largest contributing sector to the economy in Alberta, accounting for 16% of GDP.

Sector Contribution to GDP (%)
Mining, quarrying, and oil and gas extraction 16%
Real estate and rental and leasing 12%
Construction 10%
Manufacturing 7%
Other 55%

 

Saskatchewan

Saskatchewan had GDP growth of 2.7 percent in 2017, around the national average for that year. It is expected to slow to 1.2 percent in 2018, then accelerate to 2.3 percent in 2019. Saskatchewan has emerged from two years of recession brought about by low oil prices, but its slowdown was not as severe as in its neighbouring province. Like Alberta, Saskatchewan's economy was heavily dependent on the oil and gas sector, but has grown more diverse in response to low oil prices.

 

Pie chart: Saskatchewan

 

Pie chart: Saskatchewan

Mining, quarrying, and oil and gas extraction is the largest contributing sector to the economy in Saskatchewan, accounting for 18% of GDP.

Sector Contribution to GDP (%)
Mining, quarrying, and oil and gas extraction 18%
Real estate and rental and leasing 10%
Agriculture, forestry, fishing and hunting 10%
Construction 7%
Other 55%

Manitoba

Manitoba's economy grew at a similar pace to Saskatchewan's in 2017 (2.6%). It is expected to slow to 1.6 percent in 2018 and 1.2 percent in 2019, lagging behind national GDP growth. Manitoba's economy is the most diverse in Western Canada, with strong construction and manufacturing sectors.

 

 

 

Pie chart: Manitoba

 

Pie chart: Manitoba

Real estate and rental and leasing is the largest contributing sector to the economy in Manitoba, accounting for 12% of GDP.

Sector Contribution to GDP (%)
Real estate and rental and leasing 12%
Manufacturing 10%
Health care and social assistance 9%
Construction 9%
Other 60%

 

Small Businesses

Western Canada has a strong entrepreneurial spirit: Alberta has the highest number of small and medium-sized enterprises (SMEs) per capita of any Canadian province. Small business contributes more to GDP in Western Canada than in the rest of Canada (see chart).

The top five sectors in terms of the number of SMEs are:

  1. Construction: 56,330
  2. Professional, scientific, technical services: 52,405
  3. Retail Trade: 47,535
  4. Health care and social assistance: 38,405
  5. Other services: 38,275

 

Chart: Small Business' Contribution to GDP (2016)

 

Chart: Small Business' Contribution to GDP (2016)

Small businesses contributed 31% of Canada's GDP in 2016. The rate of contribution was below-average in Manitoba, average in Saskatchewan, and above-average in Alberta and British Columbia.

Geography Contribution to GDP by small businesses
Canada 31%
Manitoba 28%
Saskatchewan 31%
Alberta 35%
British Columbia 34%

 

Trade

Western Canada ran a trade surplus of $73 billion in 2017. The oil and gas industry in Alberta and Saskatchewan is the single largest contributor to the region's export success (see chart).Footnote 5

The United States is the largest trading partner for western provinces, but they have also used their access to the Pacific Ocean to cultivate trade relationships with countries in East Asia. China accounts for eight percent of exports, and Japan for four percent. The Port of Vancouver has the highest throughput of any port in Canada, and the third-most of any in North America.Footnote 6

 

Pie chart: Western Canadian Industry Exports by Value

 

Pie chart: Western Canadian Industry Exports by Value

Western Canada exported a total of $186 billion of goods in 2017. Oil and gas was the largest contributor to exports, making up 41% of the total.

Western Canada %
Agriculture 12%
Oil and Gas 41%
Mining 8%
Food Manufacturing 7%
Wood Product Manufacturing 6%
Paper Manufacturing 4%
Chemical Manufacturing 6%
Machinery Manufacturing 3%
Transportation Equipment Manufacturing 2%
Other 11%

 

Labour

Western Canada's unemployment rate fell from 6.9 percent to 6.3 percent in 2017, showing fairly balanced conditions that match the national average. However, significant differences continue to be seen among the provinces:

  • BC led the country in employment growth (+3.7%) for the second year in a row, and also had the lowest provincial unemployment rate (5.1%).
  • Alberta, emerging from two years of recession, returned to modest employment growth (+1.0%), but its unemployment rate (7.8%) remains far higher than it was before the recession.
  • Saskatchewan's employment levels contracted slightly in 2017 (-0.2%) and its rising unemployment rate has surpassed the national average.
  • Manitoba posted strong employment growth in 2017 (+2.8%), and its unemployment rate (5.4%) is below the national average.

 

Chart: Unemployment in the western provinces (2013-2018

 

Chart: Unemployment in the western provinces (2013-2018)

The chart shows unemployment rates in the western provinces and Canada as a whole from January 2013 to July 2018. The unemployment rate in British Columbia has been consistently below the national average. The unemployment rate in Alberta was significantly lower than the national average until shooting up as a result of the recession. Manitoba and Saskatchewan's unemployment rates have tended to be below the national average, but ticked up in recent months.

Date Canada Manitoba Saskatchewan Alberta British Columbia
Jan-13 7.1 4.6 3.8 4.5 6.7
Feb-13 7.1 5 3.8 4.7 6.4
Mar-13 7.3 5 3.9 4.7 7.2
Apr-13 7.1 5.6 4.1 4.4 6.5
May-13 7 5.4 4.4 4.5 6.6
Jun-13 7.1 5.4 4.1 4.8 6.5
Jul-13 7.2 5.6 4.3 4.6 6.6
Aug-13 7.1 5.4 4.2 4.7 6.6
Sep-13 7 5.5 4.5 4.3 6.4
Oct-13 7 5.6 3.8 4.5 6.6
Nov-13 7 5.9 4.1 4.8 6.6
Dec-13 7.2 5.8 4.1 4.8 6.7
Jan-14 7 5.5 4.3 4.7 6.4
Feb-14 7 5.3 4 4.4 6.3
Mar-14 7 5.5 4.5 5.1 6
Apr-14 7 5.8 3.5 5 6.1
May-14 7 5.4 3.8 4.6 6.2
Jun-14 7 5.2 3.7 4.9 6.2
Jul-14 7.1 5.3 3.3 4.5 6.2
Aug-14 7 5.5 4.3 5.2 6.3
Sep-14 6.9 5.5 3.5 4.7 6.2
Oct-14 6.7 5 3.7 4.5 6.1
Nov-14 6.7 5.1 3.5 4.4 5.7
Dec-14 6.7 5.5 3.9 4.9 5.4
Jan-15 6.6 5.8 4.5 4.6 5.6
Feb-15 6.8 5.4 4.9 5.4 6
Mar-15 6.8 5.5 4.3 5.6 5.7
Apr-15 6.8 5.5 4.4 5.7 6.4
May-15 6.8 5.8 5 5.9 6.1
Jun-15 6.9 5.4 4.8 5.9 6
Jul-15 6.8 5.7 5.2 6.1 6.2
Aug-15 7 5.8 4.9 5.9 6.2
Sep-15 7.1 5.3 5.2 6.6 6.5
Oct-15 7 5.4 5.8 6.7 6.2
Nov-15 7.1 6 5.5 7 6.1
Dec-15 7.1 5.8 5.6 7.1 6.7
Jan-16 7.2 6 5.6 7.5 6.6
Feb-16 7.2 6 6 7.9 6.6
Mar-16 7 6.1 6.2 7.1 6.4
Apr-16 7.1 6.2 6.4 7.5 5.7
May-16 6.9 6 5.9 8 6.1
Jun-16 6.8 6.2 6.2 8.1 6
Jul-16 7 6.4 6.2 8.7 5.6
Aug-16 7 6.2 6.3 8.2 5.5
Sep-16 7 6.4 6.9 8.5 5.7
Oct-16 6.9 6.4 7 8.5 6
Nov-16 6.8 6 6.9 9 6
Dec-16 6.9 6.1 6.5 8.6 5.8
Jan-17 6.7 5.9 6.3 8.7 5.5
Feb-17 6.6 5.8 5.9 8.2 5.1
Mar-17 6.6 5.5 6.1 8.3 5.3
Apr-17 6.4 5.3 6.4 7.9 5.4
May-17 6.5 5.3 6.4 7.8 5.6
Jun-17 6.5 5.4 6.5 7.5 5.1
Jul-17 6.3 5 6.6 7.8 5.2
Aug-17 6.2 5 6.3 8.1 5
Sep-17 6.2 5.6 6.2 7.8 4.9
Oct-17 6.2 5.3 5.9 7.6 4.9
Nov-17 5.9 5.4 6.2 7.3 4.8
Dec-17 5.8 5.6 6.5 7 4.6
Jan-18 5.9 5.6 5.4 7 4.8
Feb-18 5.8 5.9 5.6 6.7 4.7
Mar-18 5.8 6.2 5.8 6.3 4.7
Apr-18 5.8 6.1 6.3 6.7 5
May-18 5.8 6.5 6.8 6.2 4.8
Jun-18 6 6.1 6.3 6.5 5.2
Jul-18 5.8 6 6.6 6.7 5

 

Indigenous peoples

Indigenous people are, on average, younger than the rest of the population, and they are one of the fastest-growing demographic groups in the country. Within Western Canada more than half of the Indigenous population live in British Columbia (29%) and Alberta (28%), nearly a quarter reside in Manitoba (24%), and 19 percent reside in Saskatchewan.

Indigenous people are less well-educated than the rest of the population: about half of the Indigenous population aged 25 to 54 have a postsecondary degree, compared to 70 percent of the non-Indigenous population. Footnote 7 The unemployment rate for Indigenous people living off-reserve was 13 percent in 2016, compared to 7 percent for non-Indigenous people. Indigenous communities also score much lower on the Community Well-Being Index, which measures socio-economic indicators such as education, employment, income, and housing conditions. Footnote 8

 
Chart: Demographics of Indigenous people in Western Canada

 

Chart: Demographics of Indigenous people in Western Canada

This chart shows a demographic breakdown for the Indigenous population and the non-Indigenous population by age and sex. The Indigenous population is significantly younger than the non-Indigenous population, on average.

Age Indigenous men (%) Indigenous women (%) Non-indigenous men (%) Non-indigenous women (%)
0 to 4 years 10.03 9.12 5.69 5.34
5 to 9 years 10.83 9.84 5.91 5.49
10 to 14 years 10.02 9.02 5.50 5.18
15 to 19 years 9.57 8.56 5.84 5.39
20 to 24 years 8.55 8.38 6.46 6.00
25 to 34 years 14.27 15.04 14.56 14.31
35 to 44 years 11.38 12.31 13.49 13.64
45 to 54 years 11.33 12.33 14.07 14.33
55 to 64 years 8.43 9.09 13.81 14.15
65 to 74 years 4.05 4.45 9.08 9.51
75 years and over 1.54 1.87 5.60 6.67

 


Geography

British Columbia (Provincial population 4,648,055)

  • Vancouver – 2,463,431
  • Victoria – 367,770
  • Kelowna – 194,882
  • Abbotsford-Mission – 180,518

Alberta (Provincial population 4,067,175)

  • Calgary – 1,392,609
  • Edmonton – 1,321,426

Saskatchewan (Provincial population 1,098,352)

  • Saskatoon – 295,095
  • Regina – 236,481

Manitoba (Provincial population 1,278,365)

  • Winnipeg – 778,489