The Twenty-Four
A resilient start
Alberta makes strides early on but risks lie ahead
By Siddhartha Bhattacharya, ATB Economics 5 June 2025 2 min read
There has been no shortage of news in the tariff-stricken trade world. Last Friday, we saw how front-loading (through exports and inventories build-up) played a key role in propping up national GDP in the first quarter. More recently, U.S. President Trump doubled the tariffs on Canadian steel and aluminum imports to 50% and businesses are expecting an escalation of countermeasures from the Canadian government.
Today’s Twenty-Four takes a quick look at the recent export trends in Alberta, the largest contributor to Canada’s net trade (exports less imports).
New Statistics Canada data shows that international merchandise exports out of Alberta were up by 12.7% year-to-date (YTD) through April relative to the first four months of 2024.
The export value of energy products, the largest sub-sector, was responsible for over 90% of the aggregate increase. This was entirely driven by higher oil and natural gas production, a result of front-loading by U.S. buyers looking to avoid potential tariffs, which offset the impact of waning commodity prices during the same timeframe.
The U.S. remains, by far, Alberta’s largest trading partner, but market access improvements have expanded Alberta’s global energy clientele since last year. Bolstered by China, Hong Kong and Singapore, Alberta’s share of energy exports to non-US destinations reached 7% in April relative to a paltry 3% share observed prior to the Trans Mountain Expansion (TMX) commencing operations last May.
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Implications
Our view from our last quarterly economic outlook was that a slowing population in combination with steady employment gains would help rebalance the labour market. The September report supports this view, with the unemployment rate falling.
A key question is what happens if major projects proceed. Our forecast did not factor in the proposed Pacific Link or Pathways projects, but still had the unemployment rate falling to 5.9% in 2028. This week we asked the question, in a two-part series, “Who will build” if all these projects proceed amid slowing population growth, an aging workforce, and existing vacancies in the construction trades. Part 1 covers demographics, and Part 2 discusses the construction industry and trades.
The Bank of Canada kept its finger on the pause button at 2.25% last month and the next update is scheduled for October 28. Given today’s soft jobs report and indicators pointing to a Q3 slowdown, our base case view is that the Bank remains on the sidelines this year. However, they are keeping a close eye on elevated inflation readings and the balance of risks is tilted towards hiking. We currently have two rate hikes built into our forecast for next year.
The trivia section will be in The Seven coming out later today.
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Economics News