As for policy, the Alberta government tried to diversify the Alberta economy in a deliberate fashion back in the 1980s and early 1990s.
Starting under then Premier Peter Lougheed and also under his successor, Don Getty, the provincial government provided loans, loan guarantees and equity stakes to companies in the non-energy sector.
In one example, the provincial government backed â€œmade in Albertaâ€ banks, trust companies and investment firms. After the early 1980s recession and then a mid-decade collapse in oil prices (to $10.25 a barrel in April 1986, down from $26 in December 1985), Albertaâ€™s real estate values also plummeted. That took down many of those same provincially guaranteed financial institutions, themselves heavily invested in real estate.
The price tag to the provincial government for that diversification effort was $1.8 billion, for everything from failed loan guarantees to partially covered consumer and investor deposits.
In another diversification attempt, the province also loaned, guaranteed and took equity partnerships in everything from a forestry company to a meat packing plant, a provincial bitumen upgrader, a waste treatment plant and a high-tech company. By the early 1990s, defaults and foregone capital investments from all of the above cost the province $2.2 billion â€” in addition to the $1.8-billion financial sector collapse.
These efforts didnâ€™t help Albertans adjust to a new reality or diversify the economy. It was simply activist industrial policy, where governments pick winners and losers. The latter cropped up more regularly than the former.