Despite concerns about the rising cost of living, consumer spending has been resilient in Alberta. To help understand this, today’s Twenty-Four examines recent data from Statistics Canada on retail spending and new motor vehicle sales over the first quarter of 2026.

Alberta retail sales up sharply in Q1

Following a prolonged struggle with post-pandemic inflation and high interest rates consumers have faced significant challenges. However, after stagnating for much of 2025, Alberta's retail spending began surpassing the national economy in the fourth quarter.

In Q1 2026, the province posted a 5.5% year-over-year (y/y) jump in retail sales, as shown in the chart below. This growth rate led all provinces and exceeded the national average by more than double.

We see the following key drivers underpinning Alberta's robust retail spending performance so far this year:

• Nation-leading population growth: Alberta continues to lead the country in population growth, which came in at 1.2% to end 2025 whereas the rest of Canada posted a y/y decline of 0.4%.
• Resilient labour market: Alberta employment has remained relatively strong, whereas other regions—particularly those impacted by higher tariffs—have seen a contraction in employment. In the first quarter, Alberta led all provinces in employment growth with a 3.5% y/y increase vs. 0.4% nationally.
• Shift in travel preferences: Maintaining the pattern established in 2025, more overseas visitors are continuing to visit Alberta relative to the rest of the country. This influx of international travelers is providing a significant boost to domestic spending within the province—a topic that we will explore in an upcoming Twenty-Four.  

EV sales made a splash

In the first quarter, motor vehicle sales were a noteworthy driver of Alberta's retail spending growth, rising 6.1% with new car sales leading the way. After initial dips at the start of the year, data for March show a recovery in new car purchases.

While the market for vehicles produced outside North America gained traction, the Q1 upturn was primarily fueled by a significant jump in electric vehicle (EV) sales, which rose by 25% in Alberta and 21% nationally. Despite the sharp increase in March, EVs represent a minority (12%) of total new vehicle sales nationally.

The robust EV performance can be attributed to a few key drivers, including a spike in fuel costs resulting from the Iran war and the federal government's $5,000 rebate initiative introduced in February. 

Broad-based gains

Reflecting the Iran war-driven price spike in gasoline, both Alberta and Canada saw predictable surges in gas station revenue in March. However, Alberta's Q1 performance was distinguished by its breadth; while every retail sub-sector in Alberta expanded, two of the seven primary sub-sectors experienced declines nationally (see the chart below).

While automotive and gas station sales experienced increases, Alberta saw the most significant growth in other sectors since 2023, with a 5.6% increase in Q1. This was led by sporting, hobby, book, musical instrument, and miscellaneous goods retailers.

Meanwhile, food and beverage sales climbed 5.1%, though this largely reflects higher food costs (grocery prices rose 4.7% over the same period).  

Outlook - Offsetting factors

To project provincial aggregate consumer spending on goods, we monitor retail sales trends using ATB consumer Mastercard transaction data. This data, which tracks non-automotive retail activity, indicates that spending continued to rise in April, primarily fueled by the persistent escalation of gasoline prices.

Alberta's economy has begun the year on a strong footing. However, cost-of-living pressures are anticipated to intensify, particularly due to rising energy costs, while employment gains have levelled off alongside slowing population growth. Consequently, we project real (inflation-adjusted) consumer spending in Alberta will stabilize and grow by 2.7% this year.

Answer to the previous trivia question: Memorial Day is also known as Decoration Day because loved ones often mark the occasion by decorating the graves of servicemen and women.

Today’s trivia question: Which country produces the most electric vehicles?