In this week’s The Seven…

• OK computer - Managing the AI transition
• Waiting for Godot - The Bank of Canada stays on pause
• Forging a path - The carbon capture MOU
• Interesting Fact - Stampede attendance
• Chart of the Week - Home prices in Canada’s largest centres

“Where will we be

When the summer's gone?”

—The Doors

Don’t shoot the messenger, but summer will soon be behind us as the seasons continue their inexorable march through time. Okay, that’s a bit dramatic, but when you get to be my age, time flies. I mean, it’s already July 17! I really need to get outside and enjoy the many things Alberta has to offer.

This sense of urgency also applies to how we address the economic challenges we face. There is no doubt we need to be thoughtful and do the right things the right way, but the clock is ticking and prosperity is eroding while we dither.

From actually completing major projects (heck, completing projects of all sizes that create good jobs, make the economy stronger, and improve our lives) to attracting the investment needed to boost our weak productivity (which means working smarter not harder) to figuring out how we are going to proactively and successfully manage the change AI is bringing rather than just staring at it like a deer in the headlights, we need to significantly up our game. And fast. As my boss, ATB’s Chief Economist Mark Parsons, has stressed, it’s time to execute!

If we don’t, it’s going to be, economically speaking, a long cold winter marked by tepid growth, a falling standard of living, and a list of problems growing faster than solutions.

I’m not saying we, as individuals, don’t deserve some time napping in the hammock this summer (if you are lucky enough to get the chance), but as an economy, there’s no time to rest.

Let’s be more intelligent about artificial intelligence

Technology can be good, bad, or both. In most cases it depends on how and why it is used (think using your mobile in an emergency versus hateful social media posts). But even if used in largely positive ways, history makes it clear that new technologies are disruptive. Fire changed the human diet. The printing press changed human knowledge. The automobile changed human transportation. The internet changed human communications.

I’m not sure exactly what jobs were lost after fire was introduced, but technological advances both create and destroy jobs. Artificial intelligence (AI) will do the same. The hope is that it yields more jobs (or prosperity in some form) for more people than it eliminates. Either way, the transition to what’s next will likely be difficult for a large number of people and this requires forethought and action on the part of policymakers, business leaders, community leaders, educators, parents and pretty much everyone.

For example, a lot of farriers went out of business when cars replaced horses, but new jobs in auto repair were created. But did the farriers get the support they needed to learn auto repair? Job categories can come and go, but the people involved require help during the changeover.

Take a more recent example: When large portions of U.S. manufacturing were offshored to other countries or automated, U.S. consumers benefited from lower prices and new jobs were created in the U.S. in other industries such as the tech sector. But for the many factory workers in the Rust Belt who lost their jobs and weren’t able to relocate to California and find jobs in Silicon Valley, the transition was very painful and not properly supported. The negative consequences in the form of poverty, drug addiction, and devastated communities are still with us today.

So it is worth noting that more than 200 economists, computer scientists and tech executives—including over a dozen Nobel Prize winners—have signed a letter warning about the potential threat AI poses to the economy and jobs. Here is the 88-word letter entitled We Must Act Now: A Statement on AI’s Transformation of the Economy:

“AI may become radically more powerful over the next 10 years.

This could drive an unprecedented transformation of our economy, larger than the Industrial Revolution, but unfolding over a vastly shorter time frame. It could bring risks, including large-scale job displacement, as well as opportunities such as major gains in living standards.

Economists, policymakers and technology leaders must act now to understand the economics of transformative AI and to build the incentives, guardrails, and institutions needed to steer AI in a direction that complements humans and benefits society.”

Waiting for Godot - The Bank of Canada remains on the sidelines

In the play “Waiting for Godot,” the two main characters are waiting for someone named Godot who they believe will provide them with some sort of meaning or salvation. Godot never shows up.

What does this have to do with monetary policy in Canada at the moment? Like the characters in the play, economic watchers like myself are waiting for the Bank of Canada to either raise interest rates or lower them. Some argue that an increase is needed to tamp down inflation; others argue that a cut is needed to give the economy a boost.

Unlike Godot, the Bank does appear regularly (there are eight scheduled interest rate announcements per year) to tell us what it has decided to do. But for the last six announcements, it has left its trendsetting policy interest rate unchanged. In this scenario, Godot is not the Bank, but a change in the policy rate.

The Bank has not left the field forever. It has, in fact, made it clear that it will take action if, in its opinion, the economic conditions warrant it. As per the most recent announcement: “Governing Council will continue to assess the strength of the Canadian economy and the outlook for inflation, and is prepared to adjust monetary policy as needed.”

So while Godot could very well show up, we shouldn’t count on it anytime soon. As we’ve been stressing for some time now, monetary policy has essentially done what the Bank feels it can do to stimulate economic growth by lowering the policy rate from 5% to 2.25%. For now, the Canadian economy will need to find its growth engine without additional rate support.

Forging a path - The carbon capture MOU

From a new pipeline and methane reductions to tanker bans and environmental impact assessments, there are so many MOUs about energy policy and projects floating around these days it can make your head spin!

It started back in November with the Canada-Alberta Memorandum of Understanding. This MOU contains a laundry list of elements, but arguably the big head turner was the federal government’s interest in supporting the idea of a major new oil pipeline from Alberta to the B.C. coast. Not that long ago, this would have seemed like (pun intended) a pipedream.

The November MOU made a new pipeline contingent upon the construction of the Pathways carbon capture project. On Monday (July 13), details of a nonbinding MOU  signed by Canada, Alberta, and the Oil Sands Alliance (representing the five largest producers: CNRL, Suncor, Cenovus, Imperial Oil, and ConocoPhillips) on July 2* were released.

In a nutshell, the Oil Sands Alliance agreed to transport and permanently store six million tonnes of carbon dioxide annually by 2035 via a Cold Lake storage hub, targeting an additional 10 million tonnes of reductions by 2045 (i.e., undertaking the Pathways project). For its part, the federal government and the Alberta government will provide financial and regulatory support for growing oil sands output and reducing carbon emissions. The next milestone is November 15, 2026 when binding legal contracts are to be signed with individual oil sands companies.

What does it all mean? Given that the federal government said it wouldn’t move forward with supporting a new oil pipeline unless the Pathways project went ahead, the MOU with the Oil Sands Alliance was a critical step toward the pipeline becoming a reality. It also means that significant capital will be spent in the years ahead on the construction of the carbon capture system. The original estimate pegged the cost of the Pathways project at $16.5 billion, but Cenovus CEO Jon McKenzie said in June it would likely be between $20 billion and $30 billion.

*July 2 was also the day when Ottawa announced that it will refer the Alberta government’s proposal for a West Coast Pipeline project to the Major Projects Office.

Interesting Fact: Calgary Stampede attendance

The Calgary Stampede has released its official attendance numbers for this year’s event. Organizers say 1,411,954 attended the Stampede over the 10-day festival, down about 60,000 compared to last year, but still the third-most attended Calgary Stampede in history.

Calgary Stampede CEO Joel Cowley highlights some of the economic factors in play: “...surpassing 1.4 million guests in 2026 is quite the achievement, given the ongoing economic uncertainty and the affordability concerns of Canadians that have persisted for quite some time."

As for the demographics of this year’s visitors:

• 70% of attendees were from Calgary and the surrounding area
• 11% came from other parts of Alberta
• 12% came from elsewhere in Canada
• 7% came from outside of Canada

Chart of the Week: The relativity of real estate prices

This week’s chart shows how real estate price* change has been playing out in Canada’s 10 largest urban areas representing almost 60% of Canada’s population.

Canada’s largest metropolis—Greater Toronto—has seen the largest absolute drop in price from the peak. The benchmark price in Toronto reached an all-time high of $1,264,100 in the first quarter of 2022 compared to $943,800 today for an eye-popping drop of $320,300. In percentage terms, however, it’s Kitchener-Waterloo that has fallen the most from its price peak, down 30% versus a 25% decline in Toronto.

Benchmark prices peaked later in Calgary (Q3 2024) and Edmonton (Q2 2025) than in Vancouver, Toronto, Ottawa, Kitchener, and Hamilton. The decline from the peak has also been much smaller at just 2%.

Highlighting the differences that tend to characterize conditions across markets in Canada is the fact that three out of the 10 largest cities just posted record high benchmark prices. In Montreal, Quebec City, and Winnipeg, prices peaked in Q2 2026 and may even rise higher in the months ahead. As always with real estate, it’s a case of location, location, location.

*Prices are measured using the Canadian Real Estate Association’s Housing Price Index.

Answer to the previous trivia question: The first Edmonton Exhibition (now called KDays) was held in 1879.

Today’s trivia question: Who wrote “Waiting for Godot”?