In this week’s The Seven…

• Expensive to fuel - Sticker shock at the pumps, and other places too
• Turbulence at higher altitudes - Alberta’s tourism sector
• Systems check - Regional cracks in Canada’s labour market 
• Closer to Earth - Softwood lumber duties poised to drop, but still punishing
• Ready to launch - Record stampede tarp auction a positive economic signal
• Meet the moment - ATB Cormark Capital Markets’ energy infrastructure report  update 
• New frontier, old strength - The astronomical scale of Alberta’s lithium resource
• Charts of the Week - Tourism takes flight

“Collaboration needs to be the ultimate goal for humanity…we can do really hard things together. We just have to decide that it’s worth it, and then commit ourselves to it. It won’t be easier. In some ways, it’ll be harder. But we will be better for it. ”

—Jeremy Hansen, Canadian Space Agency astronaut and Artemis II Mission Specialist

On April 6, the Artemis II mission put humans the furthest away from Earth on record, setting the stage for a physical presence in space.

The next day, the war in Iran escalated and then eased on a two-week ceasefire.

Though oil prices have retreated from recent peaks, we are now convinced that we are in a higher-for-longer oil price environment. On Wednesday, we talked about how this is more than an energy story—the costs of a range of goods will move higher, adding to CPI inflation. Moreover, a geopolitical risk premium is likely to be reflected in oil prices.

A key implication is that countries will be looking for safe and stable places to source their energy—such as Canada. That’s the theme of a new report from ATB Cormark Capital Markets, which we dig into today. As we launch into the unknown with the conflict in the Middle East, how will Canada respond in the moment? Tackling food and energy security could provide a one-two punch of helping other countries, while bolstering Canada’s own sluggish economy.

As the Artemis II crew feels the pull of Earth's gravity again, Alberta’s economy is navigating its own forces of attraction (resilient labour market and population) and resistance (higher costs and geopolitical uncertainty).

What could have been - What’s next for interest rates

My parents taught me to not dwell on the past. Fair enough, but the past is worth looking at when it comes to inflation and the next move by the Bank of Canada.

Heading into the war in the Middle East, the Bank of Canada was in a good spot. Headline inflation was below 2%, and even the sticky core inflation readings were starting to unstick. Shelter costs were adding less to inflation with a cooling in the housing market. Lower interest rates were shaving from mortgage interest costs. All this will be upended this year, as the energy shock feeds through the broader CPI basket, as we explored Wednesday.

Bottom line: The combo of pre-war inflation breathing room and a sluggish economy means we think the Bank of Canada can see through the current price spike. But keep an eye on core inflation and inflation expectations. If both become untethered, the Bank’s hand may be forced to raise rates. It’s a risk we’re monitoring, but for now, we retain our rate hold call for 2026 given our concerns about weak Canadian growth and the breezy headwinds (CUSMA review, Iran war) with two rate hikes pencilled into our forecast for next year.

The next Bank of Canada rate announcement is April 29.

New headwinds in this high flying sector

In response to soaring jet fuel costs, fuel surcharges, minor capacity cuts and increased load factors were announced this week by airlines to manage costs.

The spike in travel costs comes during a high-flying period for the tourism sector. Last year, visitor spending in Alberta hit an estimated $15.2 billion according to Travel Alberta, driven by more international visitors. On BNN Bloomberg yesterday, I talked about why Alberta is leading the pack in attracting international visitors.

International visitors to Alberta jumped 11% last year, and are now sitting comfortably above pre-pandemic levels. Nationwide, the numbers were flat last year, and are still tracking below pre-pandemic.

Expanded air access to Alberta, including more direct flights from locations such as South Korea, Mexico, and Japan has helped fuel the increase. Calgary, in fact, led the major international airports with across-the-board gains in non-resident visits (see the Chart of the Week).

A weak Canadian dollar is helping, and Travel Alberta also points to expanded and coordinated marketing efforts. National park attendance in Alberta has surged 17% in the first two months of 2026 over the same period last year. While the ongoing recovery from the devastating wildfires in Jasper is a big part of this, attendance is up in the other parks too.

Bottom line: Higher energy costs will slow momentum in overseas travel, but some of that will be offset by greater in-province and in-country travel as many folks avoid long distance travel. Overall, we still think tourism will have a good year, but expect spending gains to ease from last year’s levels amid this latest bout of turbulence.

Beyond the near term, tourism deserves more attention as an exporting industry. That’s exactly what it does—it exports services via international visitor spending. Recall that PM Mark Carney wants to double non-U.S. exports over the next decade - tourism can help with that.

When the mean is not meaningful - Canada’s labour market

"Never try to walk across a river just because it has an average depth of four feet."

—Unknown source, but used by famous economist Milton Friedman to explain the flaw of averages.

Yesterday, I argued that averages often fail to tell the story. My example was the Canadian housing market. It looks OK on average, but then you dig deeper and find it’s cooled off in expensive markets like Toronto, but stayed hotter in more affordable places like Saskatoon. So how’s the Canadian housing market doing? It depends where you look.

Today, we have another cautionary tale with the release of the jobs report. The Canadian jobs machine is sputtering overall, with jobs dropping on a quarterly basis. But there is massive provincial variation. Job losses are concentrated in the three largest provinces—BC, Ontario and Quebec. Alberta is a clear outlier, leading all provinces in annual employment growth. We chalk it up to a number of factors—lower U.S. tariff hit, resilient population growth, construction, and now higher oil prices. Explanation aside, the size of the gains have exceeded our own expectations—jobs are tracking above our latest forecast.  

It’s easy to cherry pick job numbers to tell your own story. For example, it can happen that in one month Alberta accounts for virtually all the jobs created in Canada over a one year time period. That can be a statistical anomaly. When it happens two months in a row, as it has, I start to take notice. Over the last 12 months, the level of employment in Alberta has increased by 101K, but decreased in the rest of Canada by 14K. The last time Alberta posted larger absolute job gains than the rest of Canada (on a year-over-year basis) was in 2014. Clearly, provincial labour markets are diverging.

Answer to the previous trivia question: NASA named its current moon exploration program Artemis because, in Greek mythology, Artemis is the goddess of the Moon and the twin sister of Apollo (which was the name of the original Moon missions).

Today’s trivia question: True or false? The food menu for the Artemis II astronauts includes barbeque beef brisket.