Whoever coined the phrase “safe as houses” — at least, in the investment context — evidently never lived in northern Alberta.

The housing market has been especially volatile as of late, with resale home prices in Edmonton jumping by approximately 50% in the 12 months ended June 30, 2007, then falling back by some 10% in the five months ended Nov. 30 and finally stabilizing through the low season of winter. The spikes and drops have been still more vertiginous in more resources-dependent centres such as Grande Prairie and Fort McMurray.

For ordinary Albertans, the abundance of “for sale” signs and the slipping house prices represent the most visible sign of a softening economy. The funny thing is — outside the natural gas drilling sector, the forestry industry and the odd company-specific event, such as Dell Inc.’s closure of its 1,200-employee customer service centre — the economy isn’t softening at all. Indeed, the labour shortage is as acute as ever, and the construction of $30 billion worth of heavy-oil upgraders on Edmonton’s northeastern fringes has yet to ramp up. “Help wanted” signs compete with “for sale” signs for the attention of passing drivers, and wage inflation is still running at a 5%-10% clip.

No, it’s not the economy. What’s happening in the housing market has more to do with a surprising turn of events reported by Statistics Canada just before Christmas. During the third quarter of 2007, more people left Alberta for other provinces than arrived — for the first time since 1994. It was a small net loss, just 3,300, but telling nonetheless. Alberta still had a net gain from Ontario and Quebec, but was hemorrhaging people to Saskatchewan, British Columbia and even the Atlantic provinces — the very places from which Alberta has counted on to fill its job vacancies for almost 13 years.

The logical explanation was that many of these were the very same migrants who’d come to Alberta in past years and are now going “home” in greater numbers because low unemployment has become a nationwide phenomenon. Perhaps the virtual doubling in Alberta’s urban housing costs since 2004 has also made the financial logic of moving to Alberta less compelling. Someone from Ottawa or Abbotsford, B.C., may still find a higher-paying job in Edmonton or Calgary, but no longer a cheaper place to live as well.

Understanding the phenomenon doesn’t make it any easier to take, especially for a business community that continues to rank the labour shortage — not royalties or the high Canadian dollar or environmental uncertainties — as the No. 1 threat to continued growth. And there is no suggestion the problem will sort itself out, either. Indeed, if people start going home in large numbers, it can get a whole lot worse. What lurks is the possibility that employers will keep holding job fairs and offering big bucks, and no one will come.

Ultimately, the solution is not an economic one. In fact, it is Alberta’s single-minded fixation on the economy, born of booms and busts, that got the province into this situation.

People move for a variety of reasons. Immigrants choose Toronto, for example, for its large ethnic communities. Young adults pick university towns back east for educational opportunities. Others choose B.C. for its climate and outdoor lifestyle, or Montreal for its history and cultural milieu. But almost without exception, people move to Alberta for economic reasons: a job or a business opportunity.

Alberta has to give people a broader range of reasons to move here and to stay. Back in the 1990s, as part of the so-called Klein Revolution, the provincial government, with broad public support, made a concerted effort to make the province more friendly to business. It worked.

The government that will be elected on March 3 needs to embark on a similar push to make Alberta more hospitable to people for a range of reasons, not all of them economic. It needs to do this for the sake of homebuyers and sellers, for the sake of business and for the sake of making this a better place — not just a prosperous one. IE