Alberta’s economy slows as global challenges loom
ALBERTA – June 5, 2025 – The Business Council of Alberta (BCA) has released its Spring 2025 Alberta Snapshot, offering a clear-eyed summary of the province’s economic outlook. The twice-yearly report produced by BCA’s team of economist cuts through the noise to deliver an executive-summary view of Alberta’s economy: the good, the bad, and the urgent.
This edition comes at a time of both strength and strain. Alberta continues to lead Canada in population growth, but even with that, most indicators—from jobs to investment point to a cooling economy, and some warning lights are flashing.
“Alberta’s economic engine is still among the strongest in Canada, but we’re not immune to what’s happening around us,” said Mike Holden, VP of Policy & Chief Economist at the Business Council of Alberta. “Even more than tariffs themselves, global economic uncertainty is weighing on the province. Jobs, investment, and population growth are all slowing, and even modest forecasts of 2% growth from earlier in the year are looking like a stretch. But with Alberta’s strong fundamentals and a national focus on building and competitiveness, there’s a path to regain momentum.”
Key findings from the Spring 2025 Alberta Snapshot:
Population growth lower but strong, housing still catching up
- Alberta continues to lead the country in population growth, even as the pace moderates from record highs. After two years of growth above 4% annually, the province is projected to grow by 2.5% in 2025 and 1.4% in 2026–2027—well above the national average, supported by continued in-migration.
- Residential construction in Alberta is still trying to catch up to the recent population boom. Construction employment is up and, as of April, the province was building at a rate of more than double what we were five years ago.
Labour market beginning to cool, and some groups are struggling to find work
- Alberta added 15,000 jobs in April with gains in 11 of 16 sectors, but this follows a weak first quarter.
- The unemployment rate sits at 7.1%, while the job vacancy rate has dropped to 2.8% from 3.8% a year ago, showing Alberta employers are less eager to hire.
- Young adults and recent immigrants are struggling, with unemployment rates now at 17.2% and 12.7% respectively—both sharp increases over the last year.
Recession risk looms, but venture capital is a bright spot
- Nationally, GDP numbers in the first quarter came in reasonably well. The Bank of Canada had forecast 1.8% growth in both 2025 and 2026, but under its moderate tariff scenario, growth would slow to 1.6% and 1.4%. In a more serious scenario, GDP growth could fall to just 0.8% in 2025 and decline by 0.2% in 2026.
- But the goods news is that Alberta is consistently attracting around $700M in annual venture capital, and Q1 results show its share rising to 11% of Canada’s total (up from 9% last year), ranking second in Canada for average deal size.
Energy sector remains strong with evolving price risks
- Alberta’s oil production is robust; up about 4% year-to-date and the Trans Mountain Expansion is opening new export capacity and closing differentials. As of last year, the industry planned to deploy around $34 billion in capital investment in Alberta, an 11% increase versus 2024 and 40% above pre-COVID levels. But companies are reporting possible cuts to capital spending in the oil patch if low prices were to persist. The longer they do, the more strain there will be on the industry, future capital investment plans, and provincial finances.
- Prices softening to the low $60s per barrel could also put Alberta budget projections into question: every $1 dip in oil prices translates to a $750M hit to the Provincial budget.
A call for bold, forward-focused action
Despite challenges, Alberta retains major strengths: a young and growing population, abundant natural resources, a strong entrepreneurial culture, world-class infrastructure, strong retail spending, and a fast-growing tech sector. But the report warns Alberta’s trajectory is headed for a rougher economic ride in the period ahead, driven by factors beyond the province’s control. This is why the Council has called for urgent and bold national policy moves, that will help to build a strong Canada, and a good life for Canadians.
The Alberta Snapshot is part of the Business Council of Alberta’s ongoing work to inform decision-makers, business leaders, and everyday Albertans about the true state of Alberta’s economy, providing the insight needed to drive thoughtful and effective policy responses in order to shape a stronger, more resilient future.
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About the Business Council of Alberta
The Business Council of Alberta is a non-partisan, non-profit organization dedicated to building a better Alberta within a more dynamic Canada. Composed of the 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. https://businesscouncilab.com/