What If Calgary Diversified Beyond Oil and Gas Earlier?

The Actual History

Calgary, Alberta's largest city, has been inextricably linked to the fossil fuel industry since the discovery of oil at Turner Valley in 1914, about 60 kilometers southwest of the city. However, it was the Leduc No. 1 oil discovery in 1947 that truly transformed Calgary's economic destiny. This discovery, located near Edmonton, sparked Alberta's first major oil boom and established Calgary as the administrative and financial headquarters of Canada's oil and gas industry.

Throughout the latter half of the 20th century, Calgary's fortunes rose and fell with global oil prices. The 1970s OPEC oil embargo and resulting price spikes fueled an economic boom, with the city experiencing rapid population growth, infrastructure development, and the construction of its now-iconic downtown skyline dominated by oil company headquarters. The 1980s brought a sharp downturn following the National Energy Program and collapsing oil prices, demonstrating the vulnerability of the city's oil-dependent economy.

The 1990s saw gradual recovery, and by the 2000s, another boom was underway as oil prices climbed to record heights. The development of Alberta's oil sands became economically viable at these price points, further entrenching the region's fossil fuel specialization. During this period, Calgary's economy became even more concentrated in the energy sector, with oil and gas directly accounting for nearly 30% of the city's GDP at its peak, and indirectly influencing much more through related financial services, construction, and real estate activity.

The 2014-2016 oil price collapse hit Calgary particularly hard. The city experienced its highest unemployment rates in decades, downtown office vacancy rates soared to nearly 30% (among the highest in North America), and property values declined significantly. Unlike previous downturns, this one persisted as global forces—including climate change concerns, divestment movements, and technological disruption—began to fundamentally challenge the long-term viability of fossil fuel dependence.

While attempts at diversification have been made sporadically over the years, they gained little traction during boom times when high-paying oil sector jobs and provincial government revenues diminished the perceived urgency. Various provincial governments, from Peter Lougheed's Progressive Conservatives in the 1970s-80s to Rachel Notley's NDP in 2015-2019, initiated diversification programs, but implementation was often inconsistent and undermined by subsequent administrations or policy reversals during downturns.

By the 2020s, Calgary had begun more serious diversification efforts, particularly in technology, with some former oil and gas companies pivoting to clean energy. The city established innovation hubs and tech incubators, while the provincial government created investment funds for non-energy sectors. However, these efforts came relatively late in the global energy transition, leaving Calgary playing catch-up rather than leading. The city's workforce, infrastructure, and business culture remained heavily oriented toward the fossil fuel industry, making the transition more difficult and prolonged than it might have been with earlier action.

Through 2025, while showing promising signs of transformation, Calgary continues to weather the volatile boom-bust cycles characteristic of resource-dependent economies, with economic diversification remaining more aspiration than achievement despite growing recognition of its necessity.

The Point of Divergence

What if Calgary had seriously diversified its economy away from oil and gas decades earlier? In this alternate timeline, we explore a scenario where a combination of visionary leadership, policy continuity, and early recognition of fossil fuel vulnerability led to a substantially different economic development path for Alberta's largest city.

The point of divergence occurs in 1983, in the depths of the severe recession that followed the collapse of oil prices and the contentious National Energy Program. In our actual timeline, this period was marked by economic distress but resulted in minimal structural changes to Calgary's economic foundations. Once oil prices eventually recovered, the city largely returned to its petroleum-focused development path.

In this alternate timeline, several plausible developments coincide to create a different trajectory:

First, the provincial government under Premier Peter Lougheed not only establishes the Alberta Heritage Savings Trust Fund (as it did in our timeline) but implements constitutional protections requiring a two-thirds legislative majority to redirect its investments or withdraw beyond strict spending limits. This ensures the fund's persistence through multiple administrations and economic cycles, growing substantially over decades rather than stagnating as it did in our timeline.

Second, the University of Calgary establishes a dedicated technology commercialization office in 1984 with significant public and private funding, decades before such initiatives became common in Canadian universities. This creates an early institutional framework for translating research into viable technology businesses beyond the energy sector.

Third, a coalition of forward-thinking business leaders – including some from the energy sector who recognize the inherent volatility of commodity markets – creates a "Calgary Tomorrow" initiative that successfully lobbies for tax incentives and zoning changes to support non-energy businesses. Rather than seeing diversification as a threat to oil and gas, they position it as an insurance policy and complementary economic strategy.

Any of these changes alone might have produced incremental differences. Together, they create the conditions for a more deliberate and sustained diversification effort that fundamentally alters Calgary's economic DNA during a crucial period when the city was reassessing its future in the wake of a devastating recession.

Immediate Aftermath

Early Signs of Divergence (1984-1989)

The most immediate effects of Calgary's alternate path weren't dramatic but laid crucial groundwork. While the oil and gas sector remained dominant through the 1980s, several developments marked the beginning of a different trajectory:

The protected Heritage Fund, no longer treated as a short-term political resource, grew to over $25 billion by 1989 (compared to $12 billion in our timeline), providing stable capital for strategic investments. The fund established a dedicated "Innovation Capital" stream that offered patient, long-term financing for technology ventures based in Alberta, addressing the capital gap that typically sent promising Canadian startups to American investors.

The University of Calgary's technology commercialization office facilitated the formation of 27 companies between 1984-1989, primarily in computing, telecommunications, and medical technology. Most notably, Calgary Systems Research (CSR) emerged from university-industry collaboration, developing specialized software for industrial process control that found applications beyond the energy sector.

The municipal government, working with the Calgary Tomorrow coalition, established the first technology park in the city's northwest, offering subsidized space and clustering benefits for non-energy businesses. By 1989, this park housed 42 companies employing approximately 1,200 people – modest numbers, but representing entirely new economic activity.

Gaining Momentum (1990-1995)

As global oil prices remained relatively low during the early 1990s, Calgary's early diversification efforts gained significant momentum:

Several energy companies, facing continued margin pressure, began establishing technology subsidiaries focused on efficiency and monitoring solutions. Unlike our timeline, where similar innovations remained primarily focused on petroleum applications, these companies actively sought markets in other industrial sectors, transportation, and commercial building management.

The Heritage Fund's stable investment approach attracted international attention, with the Alberta investment model being studied by other resource-rich regions globally. The fund established a "Diversification Prize" – an annual $10 million incentive for companies establishing major non-energy operations in the province, successfully attracting mid-sized technology firms primarily from Eastern Canada and the U.S. Pacific Northwest.

By 1993, Calgary's technology sector employed approximately 12,000 people (compared to fewer than 5,000 in our timeline), with particular strength in industrial software, telecommunications, and remote sensing technologies originally developed for pipeline and wellsite monitoring.

Weathering the 1990s Oil Downturn

When oil prices fell to under $15 per barrel in the late 1990s, Calgary's more diversified economy demonstrated significantly greater resilience than in our timeline:

While the energy sector still experienced layoffs, approximately 30% of displaced workers found positions in the growing technology and advanced manufacturing sectors, compared to less than 10% in our timeline. This absorption capacity prevented the severe population decline that Calgary experienced historically during this period.

Downtown vacancy rates peaked at 14% rather than the 22% seen in our timeline, as technology firms and financial services companies serving multiple sectors continued expanding even as energy companies contracted.

The provincial government, seeing the benefits of its earlier diversification investments, increased rather than decreased its commitment during the downturn. It established the Alberta Digital Futures Initiative in 1998, creating a province-wide high-speed internet infrastructure significantly ahead of most North American jurisdictions.

Cultural and Social Shifts

Perhaps most importantly, these early years of diversification began changing Calgary's self-perception and business culture:

The city's traditional "entrepreneurial spirit," historically channeled almost exclusively into oil and gas ventures, found new expressions in technology startups and creative industries. The number of new business incorporations in non-energy sectors surpassed energy-related incorporations for the first time in 1995.

Post-secondary education enrollment patterns shifted, with computer science, electrical engineering, and biotechnology programs seeing substantial growth. The Southern Alberta Institute of Technology (SAIT) established several new technology diploma programs specifically designed in partnership with the growing local tech industry.

By the mid-1990s, Calgary had begun developing a reputation as a more balanced economy with opportunities in multiple sectors – setting the stage for much more substantial divergence from our timeline in the decades to follow.

Long-term Impact

Calgary's New Growth Trajectory (2000-2010)

As the new millennium began, the alternate Calgary's economic structure differed substantially from our timeline. While the energy industry remained important, it no longer dominated the city's economy or self-identity:

Technology Sector Evolution

By 2005, technology had grown to represent approximately 18% of Calgary's GDP (compared to less than 5% in our timeline). The sector had evolved beyond its initial focus on industrial applications and diversified into several specializations:

GeoCom, evolving from earlier Geographic Information Systems developed for resource exploration, became North America's second-largest location intelligence company, employing over 2,000 people in Calgary by 2007.
AgriTech Hub: Drawing on Alberta's agricultural heritage, Calgary became a center for precision farming technology, with companies developing automated irrigation systems and crop monitoring platforms.
Climate Engineering: Ironically, several major climate technology companies emerged from original oil industry expertise, applying geological, chemical, and engineering knowledge to carbon capture and sequestration technologies.

The "Calgary Model" of Industry-Academic Partnership

The University of Calgary and SAIT developed what became known internationally as the "Calgary Model" of technology education and commercialization:

Degree programs incorporated mandatory entrepreneurship components and industry internships
Research funding increasingly came from the Heritage Fund rather than being dependent on federal grants
Academic departments maintained formal advisory relationships with industry clusters
Faculty promotion criteria recognized commercialization and industry collaboration alongside traditional publication metrics

This model resulted in an unusually high rate of research commercialization, with the University of Calgary generating more spin-off companies between 2000-2010 than any Canadian university except Waterloo, despite its smaller size.

Financial Evolution

Calgary's financial sector, historically focused on energy financing, developed broader expertise:

The TSX Venture Exchange (previously the Alberta Stock Exchange) became a significant platform for technology company IPOs, not just junior resource companies
Several specialized venture capital firms established Calgary offices, including Western Innovation Capital (founded 2003), which raised a $450 million fund focused on industrial and agricultural technology
Traditional energy-focused investment banks established technology and clean energy divisions, creating career paths for financial professionals outside petroleum

The 2008-2009 Global Financial Crisis

The alternate Calgary weathered the 2008-2009 global financial crisis markedly differently than in our timeline:

While oil prices still collapsed from $147 to below $40 per barrel, causing significant stress in the energy sector, the city's unemployment rate peaked at 6.2% (compared to 9.4% in our timeline). The technology sector continued growing through the downturn, adding approximately 3,000 jobs even as the energy sector contracted.

The Heritage Fund, having grown to over $120 billion through disciplined management and continued resource revenue contributions, had sufficient reserves to fund counter-cyclical infrastructure investments without incurring provincial debt, including expansion of research facilities and digital infrastructure.

The 2010s: Divergent Path Through the Energy Transition

By the 2010s, the alternate Calgary existed in an increasingly different economic reality from our timeline:

Energy Industry Transformation

Calgary's energy sector evolved more rapidly toward diversification:

Major companies like EnCana (which did not split into separate companies in this timeline) diversified their portfolios earlier, with renewable energy and carbon management becoming significant business lines by 2012
Engineering expertise in large project management, historically applied to oil sands development, transferred to utility-scale renewable installations across Western Canada
The headquarters effect remained, with Calgary housing the administrative and financial functions of Canada's energy economy, but that economy itself diversified more rapidly

Avoiding the 2014-2016 Oil Crash Devastation

When oil prices collapsed again in 2014-2016, Calgary experienced a fundamentally different outcome:

Downtown office vacancy peaked at 12% rather than the nearly 30% seen in our timeline
Home prices declined by 8% rather than over 20%
The technology, financial services, and advanced manufacturing sectors continued growing, absorbing approximately 40% of displaced energy workers
Municipal finances remained stable, allowing continued investment in public infrastructure rather than the cutbacks seen in our timeline

Global Recognition and Immigration Patterns

By 2015, Calgary had developed a substantially different global image:

The city regularly ranked among North America's top ten technology hubs in various indices
Immigration patterns shifted, with Calgary attracting more highly skilled technology workers from India, China, and Europe
The city's population reached 1.4 million by 2015, approximately 100,000 higher than in our timeline, primarily due to reduced outmigration during downturns

Calgary in 2025: A Fundamentally Different City

By 2025, the alternate Calgary presents a striking contrast to our timeline:

Economic Structure

The city's GDP derives from a much more balanced mix of sectors:

Energy (including both traditional and renewable): 18% (vs. 30% in our timeline)
Technology and software: 22% (vs. 7%)
Financial and professional services: 20% (vs. 16%)
Manufacturing and agriculture: 15% (vs. 9%)
Other sectors (education, healthcare, retail, etc.): 25% (vs. 38%)

Physical Development

The city's physical form reflects its different economic evolution:

Downtown remains vibrant with under 10% vacancy, housing a mix of energy, technology, and financial headquarters
Innovation districts surround both major post-secondary institutions
Light rail transit expanded more aggressively through the 2010s as municipal finances remained stronger
Housing affordability improved as development kept pace with more steady population growth

Social and Cultural Impact

Perhaps most significant are the changes to Calgary's social fabric and identity:

The city's traditional conservative, entrepreneurial culture evolved to embrace innovation more broadly
Income inequality is measurably lower than in our timeline due to the more diverse economic opportunities
Arts and cultural institutions benefit from more consistent corporate and individual philanthropy
The "boom-bust" psychology that characterized generational experiences in our timeline has been replaced by a more confident, steady growth mentality

The Heritage Fund, reaching approximately $250 billion by 2025 (compared to about $17 billion in our timeline), provides Alberta with economic security and options that fundamentally alter provincial politics and federal-provincial dynamics around energy and climate policies.

While still recognizably "Calgary" in many ways – the mountains still dominate the western horizon, the Stampede remains a cultural touchstone, and winters are still punctuated by chinook winds – the alternate 2025 Calgary stands as a case study in how early, consistent economic diversification strategies can fundamentally alter a resource-dependent region's development trajectory.

Expert Opinions

Dr. Kathleen Merrigan, Professor of Economic Geography at Simon Fraser University, offers this perspective: "The Calgary case represents one of the most persistent challenges in regional economics – the difficulty of diversifying away from resource dependency during boom times. When high commodity prices are generating prosperity, there's little political will to invest in alternatives. In our actual timeline, Calgary repeatedly missed opportunities to use resource wealth to build a more resilient economy. The alternate scenario where the Heritage Fund was protected from short-term political pressures is particularly illuminating – Norway followed this path with its sovereign wealth fund and achieved much greater success than Alberta in managing resource wealth for long-term prosperity."

Robert Chang, Chief Economist at the North American Energy Transition Institute, provides a contrasting view: "While this alternate timeline presents a compelling vision of what might have been, I believe it understates the structural barriers to diversification that resource-dependent regions face. The 'resource curse' isn't just about policy choices but about fundamental economic forces – high wages in the dominant sector make other industries uncompetitive, specialized infrastructure serves the primary industry's needs, and political power concentrates around resource interests. Calgary's actual path wasn't simply a failure of imagination or leadership, but reflected these deep structural realities that would have been difficult to overcome even with better policies."

Dr. Maria Gonzalez, Director of the Center for Regional Development Studies, adds: "What's particularly interesting about the Calgary counterfactual is how it highlights the importance of timing. The early 1980s represented a genuine inflection point – a moment of crisis that created political space for institutional change. Similar opportunities emerged briefly after the 2014 oil crash, but by then global energy transition forces were already much stronger. The alternate timeline correctly identifies those critical junctures when different decisions could have meaningfully altered development trajectories. The lesson for other resource-dependent regions is to use crisis moments to institute structural reforms that will persist when commodity prices inevitably recover."