Alberta economy expected to outpace Canada despite oil price swings, TD Economics says
Alberta economy set to expand 2.1% in 2026, led by record oil output and rising employment, though national recession and trade uncertainty pose risks.
Alberta’s economy is forecast to grow faster than the national average this year as a rebound in energy production and stronger employment underpin activity across the province. TD Economics projects Alberta will expand 2.1 per cent in 2026, outpacing a projected 0.7 per cent gain for Canada, even as oil prices and international trade dynamics inject volatility into the outlook. Record crude production, fresh corporate investment and rising population are combining to buoy provincial growth while national GDP shows signs of contraction.
TD Economics projects 2.1% growth for Alberta in 2026
TD Economics’ latest outlook places Alberta among Canada’s top performers for 2026 with a 2.1 per cent expansion forecast.
The bank credits elevated energy market prices and stronger-than-expected oil output as primary drivers that will lift corporate profits and incomes in the province.
TD notes the province will still grow more slowly than in 2025, when its pace reached roughly 2.8 per cent, but that its momentum will remain stronger than the national average.
Energy production and prices are the main tailwind
The province’s economic resilience is being powered by the energy sector, where production is expected to reach record levels this year.
Oil prices surged above US$100 per barrel in April amid geopolitical tensions, then eased back below US$80 more recently, with West Texas Intermediate trading around US$77.54 per barrel on Friday.
TD expects prices to moderate in the second half of the year as international conflict eases, projecting an average WTI price near US$83 for 2026, which still supports investment and higher returns for producers.
Labour market gains and population growth support demand
Employment in Alberta is rising faster than in other provinces, providing a strong domestic demand base for the economy.
Data from ATB Financial show overall employment climbed by about 3.6 per cent, even though oil and gas employment has edged down roughly 0.7 per cent so far this year.
Population gains in the first quarter — nearly 9,000 new residents, the largest increase nationally — are also helping to sustain consumption, housing demand and labour supply, despite a cooling from 2024’s rapid in-migration.
Non-residential investment and construction help diversify growth
Investments beyond oil are expanding, with increased activity in transportation, utilities, clean energy and technology projects.
Non-residential construction is expected to offset a roughly 19 per cent decline in housing starts this year, as builders adjust after a record level of starts in 2025.
Several mid-sized producers have announced larger capital spending plans for 2026, while initiatives to boost pipeline capacity out of Western Canada are progressing, supporting both production and regional market access.
Corporate expansions and new projects add momentum in Calgary
Calgary has seen fresh private-sector commitments that signal broader industrial diversification.
Factor Meals, owned by HelloFresh Canada, opened a 50,000-square-foot kitchen and distribution centre that already employs about 100 people and plans to scale toward roughly 400 jobs over the coming year.
International Petroleum Corp. reported first oil from the initial phase of its $855-million Blackrod thermal oilsands project, with production expected to reach about 30,000 barrels per day by late next year, reinforcing the province’s energy output gains.
Trade review and national weakness are key downside risks
Despite provincial strength, the economy faces notable headwinds tied to external policy and national performance.
Ottawa’s ongoing review of the Canada-United States-Mexico trade agreement, combined with weaker national GDP — which showed annualized contraction in late 2025 and the first quarter of 2026 — introduce uncertainty for exporters and investment decisions.
TD economists emphasize that while some components of GDP, such as household spending, remain positive, the depth and duration of any broader downturn will determine how pronounced the spillovers to Alberta will be.
Alberta’s private and public sectors are positioning to capture growth from both energy and value-added industries, with local agri-food suppliers tapped by new distribution hubs and municipal economic-development officials highlighting the spillover benefits to regional suppliers.
Calgary Economic Development has described new facilities as a “flag in the sand” that could accelerate local value-added production, while company executives point to strong coast‑to‑coast demand as justification for scaling operations in the province.
Balancing those gains, analysts caution that commodity price swings and trade policy developments will shape the second half of 2026.
If oil markets stabilize near the bank’s forecast, Alberta should maintain its relative advantage, but a renewed slump in prices or protracted trade frictions could erode business confidence and investment plans.
For now, record output, job gains and targeted corporate investments give the Alberta economy a buffer against broader national weakness as policymakers and firms watch international developments closely.
