The Twenty-Four
In this week’s The Seven…
- U.S. midterms - All eyes on a potential trade deal
- Federal budget - The promised “investment supercycle”
- Job setback - September gains erased in Alberta
- Interesting Fact #1: YYC travel trends
- Interesting Fact #2: Alberta’s fastest growing cities
- Chart/Photo of the Week: Team ATB Economics
“Confusion that never stops/Closing walls and ticking clocks”
—”Clocks,” by Coldplay
The time in Alberta didn’t change this week, but it seems like everything else did.
The Democrats flipped the House and Senate in the U.S. midterms, a federal budget focused on investment and affordability measures, a weak jobs report and a few other key data releases (trade and provincial GDP). Stock markets plunged Thursday on fears that the AI boom may slow in the new Washington.
It’s an excuse for any economist to go on a writing frenzy. I won’t take the bait—this Seven will be under a seven-minute read.
With all the noise this week, you might think the entire world has changed. Not exactly. Yes, the Democrats flipped the Senate and House, but President Trump still has veto power and there’s no imminent trade deal. The federal budget is mostly re-announcements, with new measures that won’t really turn the GDP dial.
Midterms swing - Will this be enough to secure a trade deal?
Just before the midterms, President Trump made it sound like a trade deal was coming in days. Prime Minister Carney was more guarded, but noted that the two sides were getting closer.
The Democrats seem keen to reduce tariffs on Canada, but it will need to get past Trump’s veto. Right now, there are tentative signs that something could get done, including Senate Finance Committee Ranking Member Ron Wyden saying that there is a plan to push legislation to roll back Trump's tariffs on Canadian goods.
Our view, however, is that U.S. protectionism does not end with Democrats having majorities in the House and Senate, and will extend past Trump’s final term. As such, Canada’s outlook depends mostly on its ability to execute on the domestic game plan—namely the federal government’s promise of a new “investment supercycle.” Further, can Canada maintain its resolve to power domestic growth even if U.S.-Canada tensions ease?
“Investment supercycle” - The federal budget
Titled “Masters of our Destiny,” yesterday’s federal budget made less of a splash than Carney’s first one last fall. We see it as mostly re-announcements, with a few new measures (notably, an enhanced grocery tax benefit and new tax exemptions on eligible capital gains).
On the economy, the new measure that does stand out is the tax exemption of up to $15 million on capital gains if you reinvest in an eligible Canadian business. One of the challenges in Canada is that startups often commercialize and scale their business in the U.S., with the productivity gains accruing south of the border. This measure could help address this, though there are several conditions. For more information, ATB Wealth provides a broader overview of the Budget 2026 tax measures.
In short, the correct problem has been identified (languishing productivity and investment), the stage has been set (the Major Projects Office working to accelerate projects, a tax break on new investments and capital gains), and now it’s all about execution.
We’re more cautious than the budget’s assessment that “Canada’s Investment Supercycle has already begun.” Yes, foreign direct investment inflows have picked up, but from low levels. Further, we haven’t seen that translate in a meaningful way to capital investment outlays at home. The economic data has been wobbly, with jobs down again last month. So what, in our view, will move the dial? Demonstrating to investors that Canada can, from start to finish, execute on capital projects with more speed and efficiency than in the past.
A lot is riding on the investment supercycle with deficits of $50 billion+ over the forecast horizon. Without a significant pick-up in investment, the deficit picture will worsen according to Finance Canada’s own projections (see below).
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Jobs setback - Alberta reverses course
One month doesn’t make a trend, but it can’t be ignored either. This was a disappointing jobs report for Canada, including Alberta, as we discussed in detail this morning. Alberta’s September job gain was fully reversed last month.
We’re monitoring the trend closely, but for now we see this as a temporary dip given the nature (select service sectors, part-time) of the job decline. Further, we’re still waiting for higher oil prices and rig activity to show up in the job numbers, as oil and gas employment is still tracking below 2025 levels.
Our September employment forecast remains on track, but we could see the ‘rebalancing’ of the labour market take longer than previously expected. The jump in the unemployment rate means that job growth is still struggling to keep pace with job seekers.
Looking further out, we maintain that skilled worker shortages will be an issue if all these energy projects (Pathways, Pacific Link, and LNG facilities) go ahead.
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Interesting Fact #1: More domestic and overseas flights offset U.S. declines
YYC Calgary International Airport logged a record 19.4 million passengers in 2025, but as we recently covered, ongoing trade tensions and high exchange rates have reduced Canadians' travel to the U.S. via Alberta, which fell 11.6% in 2025 and continued dropping into 2026. Instead, travellers departing YYC are redirecting their dollars from former top U.S. destinations like Las Vegas to overseas hubs like London, U.K., or keeping spending closer to home, resulting in notable domestic passenger growth on routes like Calgary to Toronto.
Interesting Fact #2: Alberta’s fastest growing cities
Ahead of my keynote at the annual City of Airdrie economic breakfast, I prepared this chart on Airdrie's population growth. I didn’t believe it at first, so I had my team double-check.
It’s true—the City of Airdrie has experienced a whopping 6.2% annual rate of population growth since 2022. It went from just over 20,000 at the turn of the century, to over 90,000 today. Before this decade is finished, it will be at 100,000.
Airdrie's young demographic provides a population tailwind, with projections of 2.5% annual growth between now and 2040—more than a full percentage point faster than the Alberta average.
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Now let’s bring other Alberta cities into the mix. Over the last decade, Airdrie is near the top of population growth, but not quite the top (see the chart below). That honour goes to Chestermere and Cochrane, also in the Calgary CMA region. Looking at the last 25 years, Airdrie ranks second in growth after Chestermere.
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Chart/Photo of the Week: ATB Economics
We’re switching it up this week. Meet team ATB Economics: Carol Kamel (Economic Analyst), Siddhartha Bhattacharya (Director, Economic Research and Analysis), Robert Roach (Deputy Chief Economist) and yours truly.
We recently dragged ourselves away from the spreadsheets and models and gathered for professional headshots and a team photo.
Does this look like a team that knows what they’re doing? We hope so. That’s the look we were going for.
(L-R) Rob Roach, Mark Parsons, Carol Kamel, Sidhartha Bhattacharya
Answer to the previous trivia question: The Edmonton Elks are facing off against the B.C. Lions in this Saturday’s Western Final.
Today’s trivia question: When was the last time an Alberta team won the Grey Cup?