On Friday, we covered five of the top ten economic stories impacting Alberta in 2025: U.S. tariffs, slowing population growth, Canadian LNG, the AI data boom, and record housing starts. Today’s Twenty-Four completes the set.

Disclaimer: Top 10 lists are always tricky. We’ll inevitably leave some things out, but that doesn't mean those things aren’t important.

6. Over to you - Attention shifts from Tiff Macklem to Mark Carney

The economic battle switched in 2025 - from inflation to the trade war.

The Bank of Canada was confident enough to lower its policy rate further, but not by much. The big cuts actually came in 2024. This year the Bank delivered one percentage point of cumulative cuts, and now the Bank seems content at the new rate of 2.25%.

In 2025, Governor Tiff Macklem spent lots of time talking about “structural” challenges facing the Canadian economy. That’s code for things outside the Bank of Canada’s direct control, like the regulatory system for approving major projects, interprovincial trade, and diversifying export markets. In a September speech, Macklem spoke of the urgency: “Elbows up has been galvanizing, but now we need to roll up our sleeves. There is a lot of hard work to do.”

In other words, it was an “over to you” moment in Canada, as attention then turned from the Bank’s fight against inflation and to elected officials to get the economic job done.  

7. Turning Canada into a leading  energy superpower - The MOU

Fixing these structural problems is easier said than done. How do we bring back business investment? How do we reduce our dependency on the U.S.?

As Canada’s new Prime Minister, Mark Carney announced a number of goals in response to the pre- and post-Trump 2.0 economic challenges. 

- Enable $1 trillion in investment over the next five years

- Double non-U.S. exports over the next decade

- Turn Canada into the world’s leading energy superpower

- Make Canada the strongest G7 economy

It is through this lens we viewed the energy Memorandum of Understanding (MOU) between Alberta and the federal government.

The MOU checks a lot of boxes for both parties, providing a path to bolster investment, expanding energy shipments to Asian markets through new pipeline capacity (the export goal), and supporting the G7 growth goal. Of note, energy is Canada’s single largest export category, and has been a key driver of overall exports in recent years (see chart).

The MOU is just the blueprint. 2026 is the year of execution, and there are some key dates we are watching: April 1 for an agreement on the industrial carbon price and Pathways carbon capture project and July 1 for the West Coast pipeline submission to the Major Projects Office.  

8. Better than we thought - Economic resiliency amid trade turmoil

I don’t think many of us slept well in early 2025. Late night scrolling of the latest tariff news became an unhealthy habit of mine (and others?). It was a period marked by unprecedented uncertainty. In case you think that’s an overstatement, the measured level of economic policy uncertainty in Canada reached an all time high in March 2025.

Amid the fog, we ran scenarios. Lots of them. Our tariff scenario from early March included the economy barely growing (0.5% GDP growth in 2025), and 36,000 fewer jobs relative to our pre-tariff forecast.

What actually happened? Nothing even close to our scary tariff scenario. The economy did slow in early to mid 2025 and there were significant job losses over the summer. But over the September to November time frame the labour market came back to life, especially in Alberta. All told, Alberta employment expanded an estimated 2.9% this year, and the unemployment rate averaged 7.2% - pretty much in line with the 7% reading in 2024.

What can we chalk this up to? A few things come to mind. First, CUSMA exemptions, which Alberta benefited more from than other provinces. Second, faster population growth in Alberta than in the rest of the country due to interprovincial migration supporting consumer spending and housing. Third, new market access for energy (e.g. via TMX and Coastal GasLink) which enabled growth in the energy sector.  

9. Team Canada - A Breakthrough in internal trade

Have you ever heard the phrase “don’t waste a crisis?” Often attributed to Winston Churchill, former White House Chief of Staff Rahm Emanuel used it in 2008 in reference to the global financial crisis.

Well, it appears the First Ministers in Canada took the phrase to heart following Trump's tariffs and 51st state threats. Canadians, rightly, could not understand why it would be easier to trade with other countries than with other provinces and territories. If we can’t depend on the U.S, surely we can depend on each other?

Last month, Ministers responsible for internal trade signed a “Mutual Recognition Agreement.” In short, this means if a good covered by an agreement can be sold in one province or territory, it can be sold in another without having to meet additional requirements. Similar frameworks are used elsewhere, notably in New Zealand and Australia, and academic research has previously shown the benefits of the approach.

The agreement doesn’t cover everything. Notably, services are excluded, along with certain types of goods like food, live animals, alcoholic beverages, cannabis, tobacco, and plants. But considering years of inertia on the file, it’s a breakthrough.   

10. Feeding the world - Bumper crops

Agriculture was not immune to trade adversity this year, with new tariffs levied by China and India. Farmers also faced weaker crop prices while input costs remained elevated. But from an output perspective, it was a good year for Alberta’s three largest crops: wheat, canola and barley.

Alberta’s wheat production in 2025 set an all-time record at 12.3 million metric tonnes. It was also the third-highest yield on record. With global wheat production also likely to set a record, Alberta’s bumper crop comes at a time when global supply will be riding high and putting downward pressure on wheat prices.

Canola production in Alberta didn’t set a record, but was still very strong at 20% above the five-year average. The rise in output came despite farmers planting less canola this year with the yield tying 2016 for the all-time high. However, Alberta’s canola producers are dealing with a 76% Chinese tariff on Canadian canola seed and 100% on canola oil and cake. Some of the damage from this will be offset by more canola processing capacity in Canada.

Barley, meanwhile, also had a strong year with production up by 14% over the five-year average and yield at an all-time high.

Another big agriculture story in 2025 was the price of beef. The price of cattle in Alberta smashed records while the inflation rate for fresh and frozen beef bought from stores was running at 19% in November (year-over-year). Reduced supply after years of drought is a key factor explaining the higher prices.

Answer to the previous trivia question: Set in Salzburg, Austria, watching The Sound of Music is a holiday tradition for many families.

Today’s trivia question: What is a tannenbaum?