It’s relative

In this week’s The Seven…

• Hanging tough - Alberta economic forecast 
• Bonnyville - Primed for takeoff?
• Just getting started - Data centre employment
• Not just oil - Hormuz blockage puts fertilizer in the spotlight
• Interesting Fact: Moving in and out of Alberta
• Charts of the Week: Migration and age 

In a lighter week for economic data releases, let’s self-declare our Economic Outlook (released yesterday) the main event.

For the handful of you who have not read our 12-page report in depth, here’s the short version: Alberta’s economy is doing relatively well given tough geopolitical circumstances.

What makes us think that’s the case? We have monthly and quarterly data that shows Alberta’s leading (or close to leading) on a range of indicators like employment, population, and retail sales growth. Take retail sales—we just got new data showing a 9.7% y/y increase in July vs. 5.1% nationally. We turn all that timely information into an updated growth forecast for 2026.

We see Alberta real GDP growth of 2.6% this year and 2.3% in 2027, outpacing the national economy by a sizable margin. So far, so good.

But, as I talked with the media yesterday, I kept getting the question about how people are feeling. Economists aren’t always the best at talking about feelings, but here’s my best shot.

GDP forecasts, which capture how much more we’re producing, do a lousy job of capturing the mood on the street. My response to the feelings question is that two things can be true at the same time: 1) Alberta’s economy is doing better than other provinces; and 2) many Albertans are feeling the impacts of higher inflation, and stubbornly elevated unemployment (especially among youth).

In short, it’s relative. Alberta’s growth is being supported by a lighter touch from U.S. tariffs than other provinces (the province doesn’t produce as much of the products targeted by the U.S. like steel, aluminum, and autos), higher oil prices (Alberta is home to the vast majority of oil production in the country), and stronger population growth.

Yet, despite the oil price spike, it’s not a classic energy boom like we’ve had in the mid-2000s or early 2010s, mostly because oil and gas producers remain cautious on investing in new growth projects as they await more certainty on pipelines and certain policies.

Nothing makes the “it’s relative” point better than interprovincial migration. You don’t have to be doing great, but you do need to offer better opportunities than other provinces to attract new residents. And on that note, Alberta has experienced net inflows (more people coming than leaving) from the rest of Canada for 20 straight quarters in data released this week. There is a lot on the minds of businesses and households in Alberta, including the upcoming referendum. But for the time being, the economic winds are blowing in Alberta’s direction as Canadians continue to choose the province as a place to live.

The usual caveat to any forecast is that there are lots of risks. Our forecast is “boring” in the sense that we go right down the middle, not capturing big downside or upside risks.

So what could go wrong? Lots of things, like a prolonged war in Iran leading to persistently high inflation and an aggressive rate-hiking cycle, new U.S. tariffs, and a bursting of the AI bubble.

Less talked about is what could go right. The main thing is that all the talk (and increasingly policies) about building big things in Canada again could result in shovels hitting the ground. If that happens, we will be talking more about finding workers.

As you head into your weekend, here’s a parting thought: be mindful of the downside, but don’t forget about the upside.

In today’s Seven, we journey to Bonnyville, check in on the age composition of migrants, dig into sulphur, and see if there are any jobs at AI data centres.

Bonnyville - Primed for takeoff?

There’s a lot of “wait and see” right now if a new West Coast Oil Pipeline (the federal government is expected to declare it as a project of national interest under the Building Canada Act next week) will be built, along with the Pathways carbon capture project. This is, by far, where most of the upside is in our forecast for Alberta.

Few towns are more interested in how this unfolds than the residents of Bonnyville. It sits on the Cold Lake Oil Sands Deposit and is a hub for heavy oil production. Much of the construction on the Pathways carbon capture project will take place in the region. Not only that, the region is home to crop and livestock operations, a large tree nursery, a government research centre for specialty crops, and in nearby Cold Lake, the largest fighter jet base in the country.

As I presented at the Bonnyville and District Chamber of Commerce this week, the question was what if all this happens? There is excitement about a return to a new growth cycle, but also questions about how they’ll find the workers and housing to support it. Overall, I’d say the excitement more than trumped the concerns, but there was still a level of caution regarding whether these projects will actually proceed.

“The capacity to explode” - Data centre jobs

Data centres stir up all types of emotions these days. There is excitement about the economic opportunities, but also concerns about the impact on water, noise, land, and power prices.

We won’t get into all those issues (the latest ARC Energy Ideas podcast does a good job of that), but will note that data centres feature prominently in our outlook, including Meta’s $13 billion campus now under construction.

Zeroing in on the jobs piece, new data shows just how much data centres are driving employment.

• Based on payroll data from Statistics Canada, employment in data centres rose 18% in the first seven months of the year compared to the same period in 2025.
• Job postings for data centre roles have surged 68% since the beginning of 2025, according to a recent Indeed.com report.  

As for Alberta, Indeed calls the data centre boom in the province “nascent.” The payroll jobs in data centres have inched up only slightly this year, but Indeed notes that “these numbers have the capacity to explode” with the build out of recently announced projects.

It’s true that these job numbers are growing off of a low base, but it does point to an emerging area of growth that we should all be watching closely.

More than oil - Hormuz disruptions shine spotlight on fertilizers

It’s not just oil getting caught up in the Strait of Hormuz. As we’ve previously discussed, nitrogen fertilizer shipments have been constrained—providing another cost headwind to farmers (in addition to soaring diesel prices).

Sulphur has entered the spotlight in recent days. The Strait is responsible for large shipments of sulphur, used in the production of phosphate fertilizers.

Canada produces a lot of sulphur, much of it tied to oil and gas production in Alberta. But the country has no active phosphate-rock mines that are needed to produce phosphoric acid—the manufacturing input for phosphorus fertilizers. So Canada still depends heavily on imported phosphate.

Where Canada does have a home court advantage is in the production of two other fertilizer categories: nitrogen fertilizers and potash.

Indeed, Canada—almost entirely Saskatchewan—supplies roughly 80% of U.S. potash imports. In the latest Canada-U.S. trade saga, President Trump said the U.S. was exploring a deal to buy cheaper potash from Belarus. Late this week, however, Trump backed off this threat.

Interesting Fact: Moving in and out of Alberta

Alberta has long been a magnet for people from other parts of the country. Between 1972 and 2026, the province’s net gain from the rest of Canada was 735,188—the largest gain in the country. This net number masks much larger inward/outward movements, with over 3.8 million people moving into Alberta and 3.1 million moving out (some of these might be the same people).