Alberta economy leads Canada as oil prices surge on Middle East tensions
Real GDP growth forecast at 2.6 per cent in 2026 while rest of Canada stalls at 0.8 per cent, though uncertainty lingers over pipeline approvals and separation referendum.
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Alberta's economy is staying the course despite uncertain tariff policies and the impact of the U.S.-Israel-Iran war on global oil supply, according to a new report from ATB Financial released Thursday.
Alberta is forecast to lead the country this year in employment and economic growth. Real GDP growth is projected at 2.6 per cent in 2026 and 2.4 per cent in 2027, while the Canadian economy is forecast to grow by just 0.8 per cent in 2026 and 1.9 per cent in 2027. Alberta employment growth is forecast at 3.3 per cent in 2026 and 1.6 per cent in 2027.
The closure of the Strait of Hormuz due to the war is expected to push Alberta's benchmark oil price for West Texas Intermediate to an average of $84 U.S. a barrel this year, up significantly from ATB's December prediction of $61. Despite these high prices, oil companies are not spending on new projects to expand production—instead focusing on efficiency by producing more from existing facilities.
However, not everything is rosy. Albertans are still struggling with food and energy costs, and youth unemployment remains high. The province also faces investment uncertainty due to this fall's referendum on Alberta's future in Canada. The oil and gas industry is watching for Alberta to submit a proposal for a new West Coast oil pipeline by July 1. ATB chief economist Mark Parsons said pipeline approval could be a huge boon for Alberta's economy, though he cautioned against counting on it. "We could go through a period of stronger growth, but we're taking a more cautious approach," he said.