Alberta's economy is expected to grow significantly faster than Canada's this year despite geopolitical instability, trade uncertainty and inflationary pressures, according to a new forecast from ATB Financial.
The Alberta-based financial institution projects the province's real gross domestic product will increase 2.6 per cent in 2026, compared with 0.9 per cent nationally. It expects Alberta's economy to expand another 2.3 per cent in 2027, ahead of projected national growth of 1.5 per cent.
Energy sector supports growth
ATB's latest Economic Outlook says Alberta's performance is being supported by a resilient energy sector that is increasing production while benefiting from higher crude prices and improved market access for oil and liquefied natural gas. The outlook says there is further potential for growth, although ATB is maintaining a cautious investment forecast until final decisions are made on a new West Coast pipeline and oil sands projects that would supply it.
The province is also outperforming the national average across several indicators so far this year, including employment, population and retail sales growth. However, the report says the stronger provincial performance does not insulate Alberta from broader economic pressures affecting Canada and the global economy.
Tariffs and trade uncertainty remain significant constraints on Canadian economic growth, ATB says. Alberta faces a comparatively lower tariff burden because of exemptions for energy and its lower exposure to targeted products such as steel, aluminum and automobiles, although businesses affected by sector-specific tariffs of as much as 50 per cent could still face substantial impacts.
Affordability and uncertainty remain challenges
The outlook also points to several domestic pressures facing Alberta, including continued affordability challenges, expectations for higher interest rates and youth underemployment. ATB says businesses have also identified uncertainty surrounding the October referendum as a factor affecting their outlook.
"Alberta's economy is faring relatively well given the geopolitical circumstances," said Mark Parsons, vice-president and chief economist at ATB Financial. "But that does not mean every Albertan is feeling better off. Higher living costs continue to put pressure on households, while global instability is adding a layer of uncertainty that businesses cannot ignore."
ATB says the combination of global trade tensions and an energy crisis has underscored Canada's position as a supplier of resources to international markets. The outlook identifies potential upside if Canada moves forward with major projects and attracts the investment needed to strengthen its position as a global supplier.
"It should be clear by now that the world wants what Canada has to offer - abundant, safe and responsibly produced resources," Parsons said. "If recent signals and policies turn into actual project approvals and real investment, there is upside to our growth forecast for both Alberta and Canada."