In this week’s The Seven… 

• Broad-based - Population growth inside Alberta
• Partial reprieve - China agrees to reduce canola tariff
• Cattle herds - Bottom of the cycle?
• U.S. politics - Fed independence and tariff challenge
• Weakness under the hood - U.S. labour market
• Project update - Blackrod SAGD
• Interesting Fact: Lloydminster - Canada’s largest border city
• Chart of the Week: Since the tariffs - Canola exports to China

"Que sera, sera, whatever will be, will be 

The future's not ours to see 

Que sera, sera, what will be, will be”

Doris Day, "Que Sera, Sera (Whatever Will Be, Will Be)"

It’s the same, but different.

This time last year, geopolitical issues were dominating the economic headlines. That part hasn’t changed.

But the geopolitical risks have shifted, broadening beyond tariffs and U.S. protectionism. The last two weeks have brought deadly protests in Iran, U.S. intervention in Venezuela (and now potentially Greenland), and serious questions about U.S. central bank independence.

Surely, we’re at peak uncertainty. Not so, according to the Global Economic Policy Uncertainty Index. The index is elevated, but well below its peak in April 2025.

Amid the news flurry, our bottom line has not changed. Our view is that businesses will benefit from a lower interest rate environment, near-target inflation, and the push to build more faster here in Canada. New market access provides tailwinds for Canadian energy, even as oil prices sag.  But all this uncertainty will continue to weigh on hiring and investment.

It’s also worth noting that, geopolitics aside, much can still be done on Canadian soil. This week we looked at one emerging opportunity: Lithium from the brine in Alberta. Outside our borders, this week PM Carney was walking a tightrope on his mission to China: attempting to remove trade barriers with the world’s second largest economy while managing national security risks and not jeopardizing relations with the U.S. We woke up this morning to a new deal (more below).

Meanwhile, President Trump called CUSMA “irrelevant” this week, reinforcing our view that the review gets dragged on into next year. Our forecast assumes the status quo - no breakthrough on sector-specific tariffs, but that current exemptions continue.

In today’s Seven we look at the canola/electric vehicle deal with China, new stats on the population of cities, Alberta’s cattle sector, jobs in the U.S., and some fun facts about Lloydminster.

Partial reprieve: China reducing tariff on Canadian canola

This week’s China-Canada tariff announcement will provide some relief to Canadian farmers given that China is Canada’s second largest international market for canola after the United States. Before the tariffs, it was a $5 billion export market, but exports have plummeted since the tariffs as shown in our Chart of the Week.

A quick breakdown of the deal: China will lower tariffs on canola seed from a combined rate of 85% down to approximately 15% by March 1. Punitive tariffs on canola meal, lobster, and peas will be dropped entirely for the rest of 2026. In turn, Canada will replace its 100% EV surtax with a 6.1% tariff for a limited quota of 49,000 vehicles per year (roughly 3% of the Canadian market).

Slower, but still faster: Population inside Alberta

Thanks for waiting. Statistics Canada, with a lag, released its sub-provincial population estimates this week for July 1, 2025. (In demography land, we use the mid-point of the year as the basis for counting the number of people for the year).

Recall that Canada’s population grew 0.9% in 2025 as of July 1 - a marked slowdown from 3.0% in 2024 due to outright declines in non-permanent residents. In Alberta, there was a 2.5% gain, down from 4.7% the year prior.

Now we can tell you which large cities (a.k.a. census metropolitan areas or CMAs) and small-to-mid-size cities (a.k.a. census agglomerations or CAs) saw the fastest growth rates.* Here are some key findings:

Broad-based slowdown, but still relatively strong

It was bound to happen, given the sharp turnaround in federal immigration policy.  Almost everywhere you look, there was slower population growth in 2025 than in 2024. At the same time, Alberta communities were generally growing faster than elsewhere in the country.

• Three of Alberta’s CMAs were in the top 10 for Canadian population growth in 2025 while Red Deer was ranked 11th. For context, there are 41 CMAs in Canada, including four in Alberta.
• At the CA level, Grande Prairie and Sylvan Lake were eighth and ninth fastest growing in Canada. There are 111 CAs in Canada, including 13 in Alberta.

Magnet for interprovincial migrants

Alberta bound continued. Calgary and Edmonton both saw large gains from interprovincial migration of >11K each last year, accounting for 82% of total provincial growth via this channel.

Chasing affordability inside the province

Our chasing affordability thesis has proven itself out. Back in early 2024, we noted that Canadians were chasing affordable housing by moving to Alberta. We hypothesized that Edmonton, with much cheaper housing than Calgary, would see a pickup in population in an “inside-Alberta” version of chasing affordability. Right on cue, in 2025, Edmonton slightly outpaced Calgary on population growth.   

Bring on the beef: Rebuilding the herd key to lower prices

Will consumers see relief from high beef prices? The answer to that question depends on how long it will take to rebuild the cattle herd, which is at historically low levels in North America.

Canada is in a “high-price, tight-supply” environment in the cattle market. To see a significant drop in beef prices, the industry needs to move from the current rebuilding phase to a production surplus phase. Unlike chicken or pigs, cattle have a long reproductive cycle. It takes time.

Because ranchers are starting to keep more heifers for breeding, that leaves less beef available for slaughter in the short term. High feed costs and drought have in the recent past constrained herd sizes. But with feed costs coming down, ranchers have the ability to grow their herd again - at least for now.

FCC points to early signs that herd size has stopped contracting in Canada, including a slight increase in 2025 (see the chart below), but warns that the low starting point means prices remain elevated. Overall, they are calling for a modest price decrease this year.

Bottom line: While there are signs that herd sizes may be turning the corner, the long rebuilding cycle means it will take time for that to translate into lower prices.

Canada’s Food Price Report expects another sturdy increase in consumer meat prices (+5-7%) in 2026, although much of that will come from chicken due to beef-to-chicken substitution.  Overall, it sees food prices up 4-6%, continuing to outpace overall inflation (which we forecast at 2%).  

U.S. politics - Tensions escalate ahead of November mid-terms

Lots of political noise stateside, all which is adding to uncertainty. A couple things:

Delay on tariff ruling - The Supreme Court is currently deciding the legality of the administration’s sweeping "reciprocal tariffs".  As of mid-January 2026, the Court has repeatedly delayed its ruling, leaving businesses guessing.

Federal Reserve independence - The Department of Justice (DOJ) recently launched a criminal investigation into Fed Chair Jerome Powell, officially focusing on cost overruns for the renovation of the Fed’s headquarters. This week, Powell publicly denounced the probe as a "pretext" to punish the Fed for not cutting interest rates faster. The Fed is confronted with sticky inflation, which means rates won’t fall as quickly as Trump likes. Currently, the futures interest rate market is pricing in 2-3 more 25-basis point cuts this year.

Interesting Fact: About Lloydminster

I’m on my way to Lloydminster next week, a city of almost 40,000 people. Key industries include energy (particularly heavy oil, upgrading and asphalt), agri-food, retail (a hub for the region) and manufacturing.

Unlike most border towns that sit side-by-side as separate entities, Lloydminster is a single city with one mayor and one city council, even though it straddles the provincial border between Alberta and Saskatchewan. The provincial border runs directly down Meridian Avenue (50th Avenue). To make the border city work, there are few adjustments that need to be made, like:

Synced time zones - To avoid confusion, the entire city follows Alberta’s time.

Tax exemption - Because Alberta does not have a provincial sales tax, the Saskatchewan side of the city is exempt from the Saskatchewan sales tax.

Drinking age - Because Alberta’s legal age is 18 and Saskatchewan’s is 19, almost all the city's bars are located on the Alberta side.

Food inspection - Previously, food crossing the AB-SK boundary in Lloydminster was subject to federal inspection. Under 2024 changes, Lloydminster is now treated as a single jurisdiction for food. Local butchers, bakers, and grocery stores can now move products across the border street without federal licenses, as long as the food stays within city limits.  

Project Update: Blackrod SAGD

Since 2015, there haven’t been many ‘new’ oil sands projects - just expansions and optimizations. One exemption is the $1.2 billion, 30,000-barrel-per-day Blackrod SAGD (steam-assisted gravity drainage) project. The warm-up phase is underway with production slated to start this year.

Chart of the Week: Since the tariffs - Canola exports to China

In March 2024, China imposed a 100% tariff on Canadian canola oil and cake/meal. In August 2024, China then imposed a 76% tariff on Canadian canola seeds.

The result has been a dramatic drop in canola reaching that market, as shown in our Chart of the Week.  

*Census agglomeration (CA) refers to a region formed by one or more adjacent municipalities centred on a population centre (known as the core). A CA must have a core population of at least 10,000 based on data from the previous Census of Population Program. To be included in the CA, other adjacent municipalities must have a high degree of integration with the core, as measured by commuting flows derived from data on place of work from the previous Census Program.

Census metropolitan area (CMA) refers to a region formed by one or more adjacent municipalities centred on a population centre (known as the core). A CMA must have a total population of at least 100,000 of which 50,000 or more must live in the core. To be included in the CMA, other adjacent municipalities must have a high degree of integration with the core, as measured by commuting flows derived from census place of work data.

Answer to the previous trivia question: The largest global use of lithium is in the manufacturing of rechargeable batteries for electronics, electric vehicles, and grid storage.  

Today’s trivia question: When was Lloydminster founded?