REPORT: Alberta’s resource economy driving growth despite global uncertainty

CALGARY — A new report shows that Alberta’s economy continues to outperform much of Canada but warns the province’s fortunes remain tied to global events outside its control.In its annual spring economic snapshot, the Business Council of Alberta (BCA) said the province is benefitting from high energy prices and stronger confidence in the oil and gas sector, which in turn is helping to push economic growth forecasts higher as much of the global economy faces mounting concerns due to the Iran conflict, international tariffs, and other geopolitical factors.“The situation in the Strait of Hormuz, global oil demand, CUSMA negotiations, and the provincial referendum in October each introduce uncertainty that is largely beyond the province’s control,” the BCA said.However, the report described Alberta as a “genuine exception.”.“Because of Alberta’s role in providing most of Canada’s energy exports, the province’s outlook is on a different path than the rest of the country — its economic outlook improved after the Middle East conflict began. BCA economists agree with several recent bank forecasts that indicate the provincial economy is now expected to grow by 2.7% this year, up from approximately 2% anticipated before the war, largely due to higher energy prices,” the BCA said.The report also said stronger oil prices have increased confidence in the energy sector after reaching a five-year low and could push production past historical highs while improving Alberta’s fiscal position.If those high oil prices are sustained, the report says that could change the province’s fiscal outlook from a projected $9.4 billion deficit into a $6 billion surplus — a turnaround of more than $15 billion..The BCA stated that if high prices were to continue, “what this means for Albertans depends on how the windfall is used.”According to Alberta’s fiscal rules, half of any surplus goes to paying down the province’s more than $90 billion debt, and the other half can be directed toward “additional debt repayment, a one-time expense, or the Heritage Fund.”“The Heritage Fund, which currently sits at $32 billion with a target of $250 billion by 2050, wasn’t expected to receive contributions for the next three years given expectations of persistent deficits, but a surprise surplus would change that,” the report stated.“Growing the fund won’t replace resource royalties overnight, but it could meaningfully improve the province’s revenue stability in the longer term.”The BCA also pointed to signs that Alberta’s economic gains are not being felt evenly across the province.According to the report, 56% of Albertans believe Alberta’s economy is worsening, while 43% describe their own financial situation as “good.”The report noted that oil patch employment has unfortunately not kept pace with rising production levels..“Youth unemployment sits at 14.4%, driven largely by job losses in retail, and residential construction starts have eased from a 2025 peak of 65,000 to approximately 47,000 annually,” the report said.Residential construction has also slowed significantly, easing from a 2025 peak of roughly 65,000 housing starts to about 47,000 annually.At the same time, the BCA said major project investment continues accelerating across Alberta, particularly in industrial and commercial construction.Non-residential construction investment is up 22% year-over-year, with industrial and commercial developments accounting for 68% of the 532 major projects currently under construction across the province.“This momentum is expected to last even if energy prices decline,” the report said.

REPORT: Alberta’s resource economy driving growth despite global uncertainty

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