Alberta forecasted to lead Canada’s economy in 2026 despite global instability

CALGARY — A new economic outlook from ATB Financial forecasts Alberta’s economy to outperform the rest of Canada in 2026, in large part due to surging oil prices despite ongoing global instability and supply chain disruptions.The report, released Thursday, predicts Alberta’s real GDP growth will be 2.7% next year, up from a previous estimate of 2.1%, which is more than double the national projection of 1.3%.The US–Israel–Iran conflict has rattled global energy markets, pushing forecasts for West Texas Intermediate (WTI) up to an average of US$75 per barrel this year, from US$61 in December, and while higher prices are expected to drive a strong 6% increase in Alberta’s nominal GDP, they are unlikely to trigger a traditional energy boom.“Real GDP is economic activity — jobs — like whether that money translates into more of the volume of output we produce, or more employment,” Mark Parsons, Vice President and Chief Economist at ATB Financial, told CBC News.“We expect a big jump in nominal GDP because we're earning more money, but not the same increase in real GDP because not all that additional money is going to be spent in the economy.”.Producers are expected to remain cautious, maintaining capital discipline and holding real investment flat amid uncertainty over new pipeline capacity and how long elevated prices will last.“While higher oil prices will drive a surge in revenues, we anticipate that producers will be cautious with their capital expenditures,” Parsons said.“However, there is upside to our forecast if new pipeline projects proceed, creating a runway to invest in new growth projects.”The outlook shows a mixed economic bag for Albertans, as the province’s oil production remains at all-time highs and exports to Asian markets have surged significantly following the Trans Mountain pipeline expansion.However, global market disruptions have also driven up costs for both producers and consumers, with inflation projected to average 2.5% in 2026..Bank of Canada warns growth outlook worsening as economy slows and risks mount .Also, job growth is forecasted at 3.1% in 2026, with unemployment declining to around 6.4%.However, population growth is expected to slow as federal policies reduce the number of non-permanent residents entering the country.“Despite better headline economic numbers in Alberta, we know the reality on the ground for many Albertans is far more complex,” Parsons said.“Higher prices for fuel and groceries are squeezing household budgets. A resilient job market, aided by both resource sectors and growth in new sectors, is helping cushion some of those impacts.”Parsons added that the forecast may not alleviate the concerns of those who believe life is still too expensive, with high gas prices and increasing grocery costs.“The cost of living is going up. This isn't going to happen overnight, where people are going to feel better about their employment prospects,” he said.“It's a bit of a relative thing. I think that's why you're seeing people — quarter after quarter — continuing to move to Alberta. It's not because there aren't challenges in Alberta, it's just that conditions are better here than elsewhere.”

Alberta forecasted to lead Canada’s economy in 2026 despite global instability

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