If the Stampede is a barometer, visitors are still coming. This year was just shy of the 2024 attendance record (it was effectively a tie at 1,470,288 vs. 1,477,953 in 2024).

To be sure, there are challenges. Jasper is recovering following last summer’s wildfires, and it will take time to get back to normal. The food and accommodation sector in Alberta still faces labour challenges, with the highest vacancy rate of any industry. Tourism operators also face higher costs for everything from food to energy, squeezing margins.

Shifting timelines - August 1 for a new deal

U.S. tariff policy is a moving target. Given the on and off approach, we simply don’t know what the August 1 ‘deal’ will look like.

Speculation is stirring that the new tariff could exclude goods compliant with the Canada-U.S.-Mexico Agreement (CUSMA), which would lead to a much better outcome than a blanket tariff.

Recall that, outside steel/aluminum/autos, U.S. tariffs can be avoided by demonstrating CUSMA compliance. This has led to an especially low effective tariff rate for Alberta exports of less than 2% by our estimates, due to the province’s lower direct exposure to the heavily tariffed sectors.

It’s too early to change forecasts - we presented low and high scenarios to eliminate the need to keep re-running things based on every headline. Treat our June forecast as a useful guide, and we’ll keep you posted as we learn more.

A Timex moment - Will the U.S. economy keep ticking?

“It takes a licking and keeps on ticking.”

That phrase was popularized during the 1950s and 1960s to demonstrate the durability of Timex watches. The commercials often featured the watches being subjected to extreme tests like being run over, dropped from heights, or placed in washing machines.

Does it also describe the U.S. economy? Not quite, but it’s not a stretch to say that the U.S. has been more resilient than most expected to two major Timex-like tests.

Test 1: Inflation - Recall recession fears when inflation took off, and the Federal Reserve cranked up its interest rate in response. Instead of a recession, the U.S. grew by 2.9% in 2023 and 2.8% in 2024 - far outpacing Canada’s economy despite much slower population growth.

Test 2: Tariffs - This time around the U.S. economy faces a new shock - a self-inflicted tariff one. So far the ‘hard data’ on the battle-tested economy is faring reasonably well. Job growth remains decent, and the economy looks to bounce back in Q2 after a temporary contraction in Q1 caused by a rush to front-load imports to get ahead of tariffs.

So will the U.S. keep ticking? Yes, but there are very good reasons to believe the clock will slow.

First, the U.S. has not felt the full effects of inflation. Companies are sitting on pre-tariff inventory, and may be reluctant to pass through the costs to consumers. Keep in mind that we are in the early innings, and President Trump has recently turned up the tariff heat. Then there’s the Federal Reserve (the Fed). Inflation is too high for comfort, and despite ongoing pressure from Trump, the Fed will not be keen to lower its policy rate until it gets more reassuring data. Second, the U.S. fiscal situation is precarious to say the least, which is also putting upward pressure on borrowing costs.

More recent indicators don’t point to a crash, but a plane flying at lower altitude. Consumer spending growth is showing signs of cooling, and the pace of job creation has slowed. Tariffs will constrain the Federal Reserve’s ability to come to the rescue with aggressive rate cuts.

The bottom line is that, yes, the U.S. economy has performed better than expected, and it will likely avoid a recession. But the full impacts of the tariffs have yet to be felt, and fiscal headwinds are blowing harder. We expect that U.S. GDP growth will slow this year to 1.8%.

Interesting Fact #1: Love that - A heartwarming interview at Wimbledon

Tennis fans were glued to their screens the past two weeks as the famous Wimbledon tournament took place. On the men’s side, world ranked no. 1 Jannik Sinner from Italy denied Spain’s Carlos Alcaraz a three-peat at Wimbledon. For the women, Poland's Iga Swiatek convincingly defeated USA's Amanda Anisimova in the women’s singles final. Canada had 12 players entered, with Gabriela Dabrowski making it to the quarter finals of the women’s doubles for Canada’s strongest showing.

Coming off her loss, Amanda Anisimova was a class act in her speech, congratulating her opponent, thanking her mom for her sacrifice, and talking about how she’ll come back stronger than ever. It’s worth watching, in what the New York Times dubbed as a “masterclass in handling failure.”

Interesting Fact #2: Alberta’s travel deficit with B.C.

Are you and Albertan traveling to B.C. this summer for vacation? If so, you’re not alone. In 2019 (sorry it’s the latest available), Alberta residents spent $2 billion while visiting B.C. Meanwhile, British Columbians spent $0.8 billion in Alberta. That equates to a ‘travel deficit’ of $1.2 billion.

Chart of the Week: Vehicle sales zoom ahead despite higher prices

On the surface, this may seem perplexing. Unit vehicle sales in Alberta are up 12% so far this year through May, despite the fact that prices of new passenger vehicles have started to pick up as shown in our Chart of the Week.

Adding to the puzzle is that electric vehicle (EV) sales are down sharply in recent months, by 12% year-over-year in May, driven in part by the pause in January of the federal government’s EV rebate worth up to $5,000. Granted they are less than 5% of vehicle sales in Alberta, but the recent decline is a sharp reversal of last year’s gains.

What is driving demand for vehicles this year? Here are a few likely sources:

• Pre-tariff front-loading - With tariffs and countertariffs applying to autos, many customers want to get in front of future price increases. Why not buy now? So far, the impact of tariffs has been muted, in part because companies are working off pre-tariff inventories, rules that prevent stacking, and ways to get around U.S. tariffs. 
• COVID catch-up - Recall the supply chain challenges coming out of the pandemic. Parts, like computer chips, were in short supply, reducing inventories and raising prices. This created a pent-up demand as many just forgoed buying a car.
• Population growth - More people means lots of things, including cars on the road. Vehicle sales in Alberta have outpaced the rest of the country so far in 2025, with national unit sales up a more muted 4.7%. Last year, Alberta lagged on vehicle sales growth, so it makes sense that this year is stronger, especially as the province continues to outpace all others in population growth.
• Lower borrowing costs - Interest rates are still well above COVID levels, but they have come down, making it less expensive to finance big-ticket items. 

What lies ahead? The front-loading of purchases will fade as tariffs find their way into prices, and population growth will continue to slow. So it stands to reason that we’ll get a slowdown in vehicle sales in the coming months.

Today’s trivia section can be found in this edition of The Twenty-Four.