CALGARY - Alberta's Calgary-Edmonton corridor has grown into Canada's "Western tiger," piling up American-style wealth while retaining a Canadian-style quality of life, a new study by one of Canada's top banks says.

A magnet of educated migrants and blockbuster investments, the region had a "spectacular run" in the past decade, driving per capita GDP, an indicator of economic output, to US$40,000 -- 10% higher than average U.S. metropolitan areas and 40% above that of its Canadian counterparts, according to the report, released yesterday by TD Financial Group.

Its standard of living is so high it outranks all Organization for Economic Co-operation and Development nations, except Luxembourg.

"Recently, Canada has been referred to as an economic tiger [because] we have been outperforming our U.S. counterpart at a difficult time," said the study's author, TD senior economist Derek Burleton.

"If there is a tiger in Canada, it's spending a fair amount of time patrolling up and down Highway 2" -- the artery connecting Calgary and Edmonton, Mr. Burleton said.

The bank says the corridor has enormous potential, not only to widen its economic lead in Canada, but to become the most prosperous and the best place to live in North America.

"It's about time that we got recognized for what we are," said University of Calgary economist Frank Atkins. "We are one of the powerhouse economies in this country and this is an explicit recognition of it."

Roger Gibbins, president of the Canada West Foundation, a public policy think-tank in Calgary, said the study also highlights the disparity between the corridor's economic and political power, given Alberta's lack of influence in Ottawa.

"In a nutshell, that is kind of the history of Western alienation," he said.

"People assume that discontent is generated by a lack of prosperity, a failure to have wealth. In Alberta's case, it's prosperity that drives discontent. The Edmonton/Calgary corridor is not only a powerhouse, but the backbone of regional discontent in Western Canada."

The study attributes Alberta's good fortune in large measure to its vast oil and gas riches. Half a century after the commercial discovery of oil at Leduc, the industry remains Alberta's largest and accounts for 19% of the economy.

But it says low taxes, low costs to set up a business and proximity to one of the world's most attractive mountain playgrounds also helped.

"It shows low, low business costs can attract business. I think that's one lesson that has been learned and that's why other regimes are trying to follow suit to the best of their abilities," Mr. Burleton said.

With a population of 2.2-million, the Calgary/ Edmonton corridor is modest in comparison to Canada's other top urban centres -- Ontario's 6.7-million Golden Horseshoe, the 3.7-million Montreal and area region, and B.C.'s 2.7-million Lower Mainland and southern Vancouver Island.

However, "it's becoming more important as a share of GDP as it outpaces the rest of Canada," Mr. Burleton said.

Calgary was leading the country in the 1995 to 2000 period in wage and salary increases, with a 3% average annual growth, compared with 2.5% in Toronto, 1.5% in Montreal and 1.4% in Vancouver.

In terms of employment growth, the corridor ranks ahead of such cities as Boston, Chicago, San Francisco and New York. And the trend is expected to continue.

Dave Bronconnier, Mayor of Calgary, said the study accurately reflects the corridor's economic might.

"The strength of the Calgary/Edmonton corridor speaks well for Western Canada as well as all Canadians," he said, adding that its prosperity helps create jobs across Canada, attracts foreign investment and produces valuable exports.

"You look at the GDP growth, you look at the number of wealth creation on a population base, by anyone's measuring stick that is phenomenal growth."

People across Canada have been noticing. David Marshall, president of Nipissing University in North Bay, is moving to Calgary this summer to lead Mount Royal College. He said the college's drive to innovate and improve, along with Alberta's recreation opportunities, were among the job's big attractions.

"We have a feeling we can find a great career challenge and we can live in a city that appears vibrant and certainly new and exciting, and still have access to the outdoor lifestyle that is so important to us," Mr. Marshall said.

The financial industry predicts more fast-paced growth for the next few years, as Alberta benefits from massive oil sands investments and continuing bright prospects for the oil and gas industry.

But analysts also warn there are problems stemming from such a strong economy, adding that social, educational and infrastructure challenges are mounting.

They include labour shortages in many areas, a $7-billion backlog in infrastructure spending, a growing gap between the rich and the poor, and a disappointingly low number of high-school graduates going into post-secondary education, in part due to rising tuition fees.

Ralph Klein, Alberta's Premier, said tuition fees at post-secondary institutions in Alberta are within a normal range compared with fees in other provinces.

He said some students choose to delay their post-secondary experience for a few years, or attend part-time while they work.

Regarding Mr. Burleton's concern that if the economy slows down, Alberta will not be able to rely on educated workers moving from other provinces to meet the province's needs, Mr. Klein said, "I will take that as valid criticism."

"Certainly it's something that has been identified by industry as a whole, and that is the need to get more trained people -- not necessarily degreed people -- but trained people into the work force, because of the phenomenal amount of economic activity that is taking place right now."

All three levels of government need to play a role in ensuring the corridor continues to thrive, the bank says.

The Alberta government needs to give municipalities access to a broader range of revenue sources, such as a gasoline excise tax and a hotel tax, invest further in education and foster research. It also needs to legislate a reduction in capital taxes to 8%, it says.

It also recommends that Ottawa spend more money on infrastructure and reach a comprehensive border arrangement with the United States.

cgillis@nationalpost.com