In this week’s The Seven…

• It’s regional - Canada’s labour market 
• More pipelines - This one is proposed to flow east
• Food superpower - Canada’s new food security strategy
• Meta deal - New AI data centre in Sturgeon County
• Interesting Fact - Canada’s trade surplus decomposed
• Chart of the Week - En route to 7 million Albertans

“If you start me up, I'll never stop

Never stop, never stop, never stop” 

—The Rolling Stones, Start me up

The Calgary Stampede is always cause for celebration. But this one felt different. Heading into this year, our theme was “Ready, set…”. Promises had been made to build big things faster, but with serious questions about whether shovels would hit the ground. The mood I sensed this year was that progress had indeed been made.

A West Coast pipeline is not a done deal, but it now has broad-based Alberta, B.C. and federal alignment. That’s no small feat. And this week a major data centre was announced in Sturgeon County.

Economic optimism aside, we’re not getting carried away. We prefer to see final decisions on projects before baking them into our forecast. The geopolitical situation is volatile, with the ceasefire in Iran now broken. Many consumers remain stretched after years of high inflation, and there are serious questions about the sustainability of the AI boom in the U.S.

Right now the Canadian economy is slowly improving after a tough start. But it’s still waiting to really get going. If the economy could talk after years of underinvestment, it might just belt out some Rolling Stones.

This looks different - Alberta’s unique labour market

We all know there’s no such thing as a national housing market. It’s regional, not national. I think the same can be said about the labour market in Canada these days.

The national headline numbers show an improvement in the second quarter, but with massive provincial variation.

Alberta is an outlier. It has accounted for most of the job growth in Canada so far this year—advancing in both Q1 and Q2. And yet, the unemployment rate remains sticky at 6.5-7% in recent months. The main reason is more persistent demographic trends. It’s one of the few provinces with the population expanding, resulting in strong labour force entry.

The other large provinces are either down in jobs over the last 12 months (-0.9% y/y in QC, -0.8% y/y in BC) or up slightly (+0.8% y/y in ON). This can partly be attributed to more tariff pressure in sectors such as steel, aluminum and lumber, but also a marked pullback in population—hurting housing and service-related activity.

For more details on today’s job numbers, check out The Twenty-Four from earlier this morning.   

Pipelines, pipelines, pipelines - Now to build (and fill) them

At the Calgary Stampede, the talk of the town was pipelines. What a difference a year makes. Remember when the chatter was about plateauing production in the face of new pipeline constraints?

As we discussed last week, Alberta has officially submitted its West Coast Pipeline project to the Major Projects Office (1 million barrels per day), with the federal government deciding by October 1st if it’s a project in the national interest for fast-tracking. In addition, the revived Keystone XL, or Prairie Connector, is in play with a final investment decision expected next year (0.5 million barrels per day). Enbridge and Trans Mountain are planning their own expansions and optimizations.

And the latest from Stampede this week is that Alberta and Ontario are pitching the potential for a 0.5-0.8 million barrels per day pipeline from Hardisty, Alberta to Sarnia, Ontario. The mission would be to reduce reliance on the U.S. route and overall dependency on imported crude. This is early stages—the West Coast Pipeline is further advanced and widely considered more likely.

Build it and they will come?

The question is now turning to whether companies can step up to fill them. Last week’s announcement included an MOU between Alberta, Canada and the Oil Sands Alliance (Canada Natural Resources Limited, Suncor Energy Inc., Cenovus Energy Inc., Imperial Oil Limited and ConocoPhillips Company). One of the objectives of that MOU is “supporting the development of fiscal and regulatory frameworks to enable substantial oil sands development and production growth.” The other objectives include emissions reduction, Indigenous engagement and expanded market access.

In our pipeline impact report, we estimated that 1.5 million barrels per day of new capacity would require roughly $100 billion of private upstream investment.

Not just energy - Making Canada a food superpower

Somewhat lost in the pipeline and Iran war news is a new federal plan to boost food security.

The June 2026 National Food Security Strategy is a 10-year, $3-billion plan focused on lowering food prices and making the country less dependent on foreign imports. It has four main components:

More Grocery Competition: Build local food hubs so independent grocery stores can buy products cheaper without relying on big supermarket chains. 

Processing Food Locally: Turn raw crops into finished food products.

Year-Round Growing: Investing in indoor greenhouses and vertical farms in Canada.

Cutting Red Tape: Speeding up government approvals for things like seeds and fertilizers, and making it easier to sell food across provincial borders.

It’s unclear how much these measures will move the needle, but at least the issue is getting some attention. Canada is a major producer (in fact, the top producer of some commodities like canola). And can we really debate the future direction of global food consumption? Despite often dry conditions, Canada has fresh water advantages over other countries, including the U.S. Overall, agri-food is a massive comparative advantage that the country should be exploiting.

Meta deal - New AI data centre in Sturgeon County

Alberta is a promising destination for data centres—deregulated electricity system, abundant and low-cost natural gas, and cold temperatures—but we’ve been waiting for final decisions on several projects.

Meta announced this week that it will build its first Canadian data centre in Sturgeon County, part of Alberta’s industrial Heartland northeast of Edmonton. The 1-gigawatt facility represents Meta’s 33rd data centre globally and involves an investment of $13 billion, with the company claiming roughly 3,000 construction workers and over 300 permanent operational jobs once complete.

To support its massive energy needs, power will come from a mix of grid electricity and on-site natural gas generation, anchored by a $4.6 billion natural gas plant developed by Pembina Pipeline.

The project will use a closed-loop liquid-cooled system with dry-cooling and Meta has pledged roughly $60 million in local infrastructure improvements, including roads and water infrastructure.

Interesting Fact: Peering under the hood of Canada’s trade surplus

My favourite economics joke goes like this (I tell it at some events, as most of my other econ jokes flop):

Two economists go hunting. The first economist takes a shot that goes 10 feet to the right of the target. The second economist takes a shot that goes 10 feet to the left of the target. They give each other a high five and say “I think we got it!”

The point is that averages can be misleading, or mask a great deal of variation. I can think of no better example than Canada’s trade surplus.

In May, Canada recorded its largest trade surplus in four years at $4.2 billion. But if you remove energy from the picture, Canada runs a massive merchandise trade deficit. In fact, in 7 of the 11 major product categories tracked by Statistics Canada, the country has imported more than it has exported so far this year (see chart).

Chart of the Week: En route to 7 million

Do you ever wonder what Alberta will look like in 25 years?

We take pride in our forecasting ability, but we’re the first to admit we don’t know exactly what will happen in the next quarter century.

If there’s any long-term forecast you could take some stock in, it’s population. The beauty of demographic projections is you know roughly how many people are here today, including their ages and genders. The demographic data sets are rich.

You just need to age people forward, apply age-specific fertility and mortality rates, and then make a few assumptions on migration. Do all that, and voilà, you have a credible demographic forecast.

The demographics team at Alberta Treasury Board and Finance (TBF) have released new detailed population projections for Alberta out to 2051.

The near-term numbers line up closely to our latest economic forecast—a period of slower population growth in 2026 and 2027 due to temporary resident outflows. Then a normalization. It averages out to 1.3% population growth between now and 2051 (medium-growth scenario). That’s much higher than national forecasts due to two factors: 1) interprovincial migration; and 2) natural increases (births minus deaths).

In the absence of a crystal ball, TBF runs low and high scenarios as well. TBF’s medium-growth projection is pretty close to Statistics Canada’s M2 medium-growth scenario. In that scenario, Alberta exceeds B.C.'s population by 2038 to become Canada’s third most populous province.

Bottom line: Expect around 7 million Albertans by 2051 (up from 5 million today), with a population that’s older and more urban than you see right now.

Answer to the previous trivia question: The Baumol effect (a.k.a. Baumol's cost disease) happens when wages rise for jobs that have experienced little or no increase in labour productivity in response to increased wages for jobs that did experience high productivity growth.

Today’s trivia question: Launched on this day (July 10) in 1962, what is the name of the world’s first active communications satellite?