ATB’s fourth annual Business Summit was held last week in Calgary. Here’s a recap of the economic risks and opportunities facing Alberta today, as shared by ATB Vice President and Chief Economist, Mark Parsons.

The current state: Tariff whiplash and uncertainty overdrive

Despite the recent climb down in tariff threats, we’re nowhere near through the trade war woods, with U.S. tariffs sitting at levels we haven’t seen since the 1930s.

While Trump continues to talk about the impact the tariffs will have on the stock market, the bigger story is arguably the impact on the bond market. Rising bond yields, which will make servicing the U.S. public debt more expensive, may be the top reason for President Trump’s de-escalation following the “Liberation Day” tariffs announced on April 2.

This highlights that we don’t just need to be worried about U.S. tariffs on Canada; we need to recognize that it’s the whiplash of it all, and the uncertainty of what’s next, that is potentially most damaging to our economy.

We are collectively living in unprecedented levels of uncertainty. Uncertainty is the new certainty and will continue to hold back business investment and dampen economic growth.

Given that there is only so much we can do to influence U.S. trade policy, we see the value of refocusing on economic opportunities and challenges in Canada, and Alberta, that were present well before Trump 2.0.

Getting things done in Canada

The Canadian economy was weakening well before tariffs and the return of Donald Trump. The tariff threat has, however, been a wake up call for Canada with many Canadians now discussing exactly what economists have been raising for years: how do we drive the next leg of Canadian economic growth, and how do we address our domestic economic challenges?

Let’s start with two clear observations regarding the past decade:

First, the Canadian economy, in per capita terms, has been moving sideways. This has been driven by areas like consumer and government spending, but not through added investment. As such, we don’t have a GDP per capita problem as much as we have an investment per capita problem. We need to find ways to attract capital back to Canada.

Second, Canada faces a critical productivity challenge. Sustained increases in labour productivity are essential for real per capita income growth, making it a vital issue as Canada's population ages and more individuals exit the workforce. Addressing these shifts will involve upgrading skills, investing in technology, commercialising ideas, scaling up companies and expanding into new markets.

Alberta’s economy has been adjusting to a number of energy ‘shocks’ over the past decade, and is finding ways to grow with lower levels of oil and gas extraction investment. In the near term, it faces headwinds from trade uncertainty, including the impact of lower oil prices. This is expected to slow economic growth this year and next, though the province is expected to outpace the national economy. Over the long-term, a number of forces will shape the outlook: 

Filling labour market gaps

Alberta’s challenge isn’t so much job creation; jobs have been added, just not at the rapid rate that people have been coming to the province looking for work, keeping unemployment elevated. Despite this, labour shortages persist in certain industries such as the trades. The opportunity is to get better at training, retraining, credential recognition, and smart immigration policy.

Market expansion

|Tariffs have shone a light on Canada’s outsized dependency on a single market, and are making it more critical than ever to take action and expand our customer base. There are signs of progress, for example in the energy sector through exports of crude oil to Asia, but more work needs to be done. And fast.

It’s not just international markets that need our attention; we also need to get better at trading with ourselves. Internal trade barriers continue to create economic friction within Canada, despite the removal of internal barriers to trade being entirely within our control.  The time is now to take action and boost interprovincial trade, which according to the International Monetary Fund, could boost GDP per capita by about 4%.

Moving downstream

With lower levels of oil and gas extraction investment, downstream activities have taken on increased importance, adding more value to resources and helping diversify Alberta’s investment base.

Energy is one of Alberta’s superpowers and thinking about how we can build on our abundant energy resources and expertise to produce more value-added products such as hydrogen and petrochemicals is a clear avenue for growth. A similar downstream trend can be found in the agri-food sector. Food manufacturing investment intentions for 2025 are $663.2 million, the second highest on record after 2024.

Building on strengths, expanding into tech

Growth is coming from different areas for the province, and broader than before: hydrogen, food manufacturing, emissions reduction technology, aviation, just to name a few. To understand the potential of these industries on Alberta’s economy, we can look at how Alberta quickly emerged as a major player in Canada’s technology sector, recently covered in An Innovation Revolution: How Alberta is Building the Future of Tech.

What can be done?

Today’s landscape serves as a critical "wake-up call" for Canada to leverage its rich resource strengths, strategically expand into overseas markets, and build major projects that will secure a prosperous future.

Answer to the previous trivia question: According to a non-human “brain” (the Gemini AI model), the human brain contains a vast number of synapses, estimated to be in the range of 0.15 to 2 quadrillion, or 150,000,000,000,000 to 2,000,000,000,000,000.

Today’s trivia question: Including this year, how many times has Canada hosted the G7 summit?