‘Economic engine’: U of A contributes $19.4 billion a year to Alberta’s economy

Revenue generated by the university accounts for more than five per cent of Alberta’s annual GDP, new study shows.

Aerial photo of the University of Alberta's North Campus. (Photo: Richard Siemens)

The University of Alberta contributes more than 19 billion dollars annually to Alberta’s economy — accounting for more than five per cent of the province’s GDP, according to a new economic impact study. (Photo: Richard Siemens)

The University of Alberta generates $19.4 billion a year for the province’s economy, contributing more than five per cent of Alberta’s GDP — the equivalent of the provincial health care and social assistance industry or the revenue from 84 thriving Edmonton Oilers NHL teams — according to a new economic impact study.

The study also shows that every dollar the province invests in the U of A brings a return of $4.80. The long-term value that comes with the return generated by research and alumni education boosts that figure significantly over a longer span. 

“The University of Alberta plays a critical role in the province’s success. The university generates the innovative ideas, pioneering technology and highly educated workforce needed for the province to prosper,” says Bill Flanagan, president and vice-chancellor.

Of the university’s total economic impact, 82 per cent — or $15.8 billion — comes from the direct and indirect impact of research, and the alumni education premium, based on the earnings associated with higher levels of education.

Innovation encourages investment

The research impact looks at how knowledge and technology contribute to provincial GDP growth over time, and includes increases in employment, capital and productivity.

The study valued the contribution of U of A research and development to the province’s GDP at $8.2 billion.

For example, Canada’s largest energy research cluster, Future Energy Systems, is based at the U of A and involves 121 projects, 143 researchers and more than 1,000 graduate students, supported by a $75-million investment from the Canada First Research Excellence Fund in 2016.

In November 2022, the institution received nearly $11.5 million to help increase capacity to discover and develop vaccines and treatments for emerging pathogens. And last month, an $80.5-million funding boost gave the green light for the Canadian Critical Drug Initiative to create an integrated research, development and manufacturing cluster in Edmonton.

“When we sell Alberta to the world, talent, innovation and impact are at the top of the list. The U of A’s contributions to Alberta and the world make it a major player in the economic growth of the province and our ability to showcase Alberta as a destination of choice for high-impact global investment,” says Rick Christiaanse, CEO of Invest Alberta

“It’s an exciting time for Alberta, and the U of A is the perfect example of a place where big things grow from exciting new ideas.”

Post-secondary education adds value

The study further found Alberta workers with a U of A degree earn higher average salaries, accounting for an estimated $7.6 billion in economic impact, with more than $4 billion of that sum coming from bachelor's degrees alone.

“We tend to think of Alberta’s competitive advantage being energy and agriculture. While we are global leaders in these fields, our true advantage is our people — their ideas, their entrepreneurship, and courage to lead and build,” says Malcolm Bruce, CEO of Edmonton Global

Demand for post-secondary education continues to grow, with U of A admission applications having increased by 25 per cent in the past six years and projected to grow an additional 20 per cent by 2028.

The institution recently received $48.3 million in provincial funding to expand enrolment in high-demand programs with the goal of funding 2,000 more students by 2025 and eventually expanding enrolment to over 50,000 students, allowing the positive impact of the alumni education premium to continue growing. Much of this talent is retained in Alberta — 75 per cent of all U of A graduates and 84 per cent of those who graduated within the past 10 years have remained in the province. 

“The University of Alberta is intricately linked to Alberta’s future. It’s obvious that investments into the University of Alberta pay huge dividends to our economy, our communities and all Albertans,” says Bruce.

Much of the U of A’s institutional spending returns directly to the Edmonton region, with more than $1 billion going to salaries and benefits and $150 million to student aid. Spending by visitors who travel to the university to visit students or attend conferences accounted for $332 million. 

The study was undertaken by R.A. Malatest & Associates, following a similar approach to a prior study released in 2012. The latest study, which focused on the 2021-22 period, also included an analysis of how provincial funding is used to leverage funding from other sources.

“The University of Alberta is an economic engine for the Edmonton region and all of Alberta. Their financial impact is substantial today and we see this growing significantly in the near term,” says Bruce.

“Our excellence in growing sectors such as artificial intelligence, energy systems and precision health will help ensure the province remains at the forefront of the changing global economy for decades to come,” says Flanagan.