Why do changes in world oil prices strongly affect Alberta’s economy?

Changes in world oil prices strongly affect Alberta’s economy because the province holds the vast majority of Canada’s known fossil fuels. Alberta is the primary producer of the country’s natural gas and crude oil, with significant development of heavy oil and oil-sands deposits located in regions such as Fort McMurray, Lloydminster, and Cold Lake.12

Because the petroleum industry is central to the province's financial health, fluctuations in global market prices directly impact economic stability. This industry has historically driven broader economic activity, including support for construction, manufacturing, and population growth, as well as the development of extensive pipeline networks and telecommunications infrastructure. To manage these revenues for the long term, the province established the Heritage Fund, which saves and invests income derived from its oil and gas reserves.1234