Alberta Set for Strong Growth Amid Global Economic Headwinds

Canada's economy is facing significant headwinds due to the ongoing global energy shock caused by the war in Iran and the blocking of the Strait of Hormuz. This has led to a downgrade of Canada's real GDP growth forecast from 1.6% to 1.3%. However, Alberta is expected to perform better than other provinces, with a revised forecast of 2.7% real GDP growth this year.

The upgrade in Alberta's forecast is not solely due to the surge in oil prices, but rather the province's economy has outperformed expectations in late 2025 and early 2026, particularly in the labor market. This has led to a reevaluation of the previous cautious view. While the nominal GDP is expected to increase by 6.0% in Alberta, driven by the surge in oil prices, this is not considered a traditional energy boom.

Outside of the energy sector, growth is expected across diverse sectors such as petrochemicals, food processing, tourism, and aviation. The labor market is also rebalancing, with employment growth expected to outpace population growth. However, households are still being squeezed by higher food and energy costs.