Alberta's economic outlook is bucking national trends, showing surprising strength amidst global economic uncertainty. A new report by the Business Council of Alberta (BCA) labels the province a "genuine exception," attributing its positive trajectory to its role as Canada's primary energy exporter. While other provinces grapple with inflation and trade challenges, Alberta benefits from high energy prices, largely due to the ongoing conflict in the Middle East.
The BCA economists align with forecasts projecting Alberta's economy to grow by 2.7 per cent this year, a notable increase from the 2 per cent anticipated before the war. This growth is fueled by increased confidence in the energy sector, potentially pushing production beyond previous highs and improving the province's fiscal standing. S&P Global Ratings affirmed its 'AA-' long-term issuer credit rating on Alberta, expecting the province's GDP per capita to exceed the national average in 2026. They estimate real GDP will increase by 1.8% in 2026 and 2.3% in 2027, outpacing Canada's projected growth.
However, the report also highlights some concerns. More than half of Albertans (56 per cent) believe the provincial economy is declining, even though 43 per cent consider their own financial situation to be "good". Furthermore, oilpatch employment hasn't kept pace with production growth, and youth unemployment remains high at 14.4 per cent, with residential construction starts also declining. Despite these challenges, major project investments are accelerating across Alberta, with non-residential construction investment up 22 per cent year-over-year. The council anticipates this momentum will continue, even if energy prices decrease.
While Alberta's economy is currently strong, it remains vulnerable to external forces. The province's reliance on the energy sector means that global events and price fluctuations can significantly impact its economic performance. The province is forecast to grow at a slower pace in 2026 as ongoing trade uncertainty following broad tariffs introduced by the U. S. last year and slower population growth weigh on activity. Despite the projected deficit, Alberta is expected to outperform the rest of the country this year.
