The Business Council of Alberta (BCA) today released its Spring Economic Snapshot detailing its view of Alberta’s economy. While the conflict in the Middle East and resulting energy price shock has negatively impacted much of the world’s economy and challenged the business environment across Canada, BCA’s analysis finds Alberta is in a unique situation, with its near-term outlook largely improving due to factors outside of the province’s control. Read the Spring Economic Snapshot.
“While 2026 started with a more positive global outlook, the conflict in the Middle East and subsequent oil price shock has negatively impacted world markets and economies, and added to challenges Canada was already facing,” said Mike Holden, Vice President of Policy and Chief Economist at the Business Council of Alberta. “Alberta is a genuine exception to that story right now due to high energy prices, however we need to keep in mind that a lot of what is driving the improved outlook could change quickly.”
Prior to the conflict in the Middle East, Canada’s growth had already slowed from 2.0% in 2024 to 1.7% in 2025 and was projected to drop to 1.2% this year, driven by slowing population growth and lower US bilateral trade. Higher energy prices, rising inflation, and a new 10% tariff on non-CUSMA goods are now adding to those pressures. Canada’s position as a major energy exporter provides some offset to the downward trajectory through increased oil and natural gas industry income.
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 ~2% anticipated before the war, largely due to higher energy prices. Higher oil prices have increased energy sector confidence from a five-year low and could push production beyond recent historic highs, while improving the province’s fiscal picture.
However, Alberta’s improved outlook is not without risk. 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.
BCA’s Snapshot also finds that while the Alberta outlook improved, the positive impacts are uneven outside of the energy sector and consumer sentiment is reflecting that unevenness: 56% of Albertans believe the provincial economy is worsening, while 43% describe their own financial situation as good. In addition, oilpatch employment has not kept pace with production growth, 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 ~47,000 annually.
At the same time, major project investment is accelerating across Alberta with non-residential construction investment up 22% year over year, with 68% of the 532 major projects currently under construction being industrial or commercial. This momentum is expected to last even if energy prices decline.
“The Economic Snapshot is intended to give a complete picture of where Alberta stands and ultimately that picture is mixed,” continued Holden. “While today’s outlook is stronger than it was a few months ago, the forces shaping Alberta’s economy including conflict, trade negotiations and energy markets will determine whether the strength lasts.”
A snapshot of the data:
- Global growth was revised down to 3.1%, with a risk of falling to 2% if the Middle East conflict drags on. The IEA projects global oil demand will contract this year for the first time since COVID, reflecting supply constraints and high energy prices.
- Canada’s growth had already slowed from 2.0% in 2024 to 1.7% in 2025 and is now projected to slow further to 1.2% this year.
- Alberta’s economy is expected to grow by 2.7% in 2026, up from ~2% forecast pre-war.
- Alberta’s fiscal outlook could swing from a projected $9.4 billion deficit to a $6 billion surplus if high oil prices are sustained — a potential turnaround of more than $15 billion.
- Alberta’s unemployment rate sits at 7%, up slightly from 6.5% but in line with the national average.
- Youth unemployment, though improved over last year’s record high, remains elevated at 14.4%, with job losses concentrated in retail over the last few years, where employment is down by 16%.
- Of 532 major projects currently under construction in Alberta, 68% are industrial or commercial; of 447 proposed projects, 93% are non-residential.
- Non-residential construction investment is up 22% year over year; residential construction is down 10%, with new home starts easing from a 2025 peak of 65,000 to ~47,000 annually.
- 56% of Albertans believe the provincial economy is worsening; 43% describe their own financial situation as good.
The full report is available here.
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About the Spring Economic Snapshot
BCA’s Economic Snapshot is a twice-yearly executive summary compiled by BCA’s economists that cuts through the noise to give a clear, forward-looking view of Alberta’s economy — the good, the bad, and the urgent.
About the Business Council of Alberta
The Business Council of Alberta is dedicated to building a better Alberta within a more dynamic Canada. Composed of more than 130 chief executives and leading entrepreneurs of the province’s largest enterprises, Council members are proud to represent the majority of Alberta’s private sector investment, job creation, exports, and research and development. The Council is committed to working with leaders and stakeholders across Alberta and Canada in proposing bold and innovative public policy solutions and initiatives that will make life better for Albertans.