In this week’s The Seven… 

• Let’s get technical - Recession or not, it’s still rough out there for many
• It’s hot, then it’s warm - Population growth cools
• A masterclass in resiliency - Jasper and Fort McMurray 
• Not just bricks and mortar - Canadian innovation outcomes also lag
• Interesting Fact: Calgary- based NanoTess, a life sciences success story
• Chart of the Week: Changing lanes - auto and energy exports 

“Monetary policy can’t reverse the damage caused by the ongoing trade conflicts. But structural reform could help improve Canada’s productivity and competitiveness, including measures such as….”

-Tiff Macklem, speech on Sep 23, 2025

Tiff Macklem is the Governor of the Bank of Canada, which means he normally doesn’t talk about things outside his monetary policy lane. But that’s what he did this week in Saskatoon. Among the ‘structural reforms’ Macklem cited were knocking down interprovincial trade barriers, speeding up regulatory approvals and diversifying into new markets. 

This has parallels to the famous “Break the Glass” speech on Canada’s productivity crisis by Senior Deputy Governor Carolyn Rogers -- a pre Trump 2.0 address (yes, there were ‘structural’ challenges before President Trump re-entered the scene).

Funny timing, as last week I argued that Macklem appears to be having an ‘over to you’ moment. Macklem is almost out of monetary policy ammunition. Other policy levers outside his reach will need to be pulled. 

The timing for doing all these structural things is now, as we continue to digest ‘hard data’ showing that this trade war is causing economic damage, alongside some more perennial problems like lagging investment and productivity. 

In this chart-heavy The Seven, I take us on a journey from Jasper to Fort McMurray - prime examples of resiliency in the face of adversity.

A recession? GDP data says likely not, but ask Ed Sheeran 

Economists are now obsessing over whether a Canadian GDP contraction in Q2 will be followed by another one in Q3. That would be a technical recession, although the official arbiter (C.D. Howe Institute Business Cycle Council) looks at a broader range of indicators.

July GDP released this AM shows a 0.2% uptick and the advance reading for August is flat. Our view is that the Q3 reading will indeed be positive as exports whipsaw back after tariff-induced gyrations.

Don’t trust economists to figure this out? Memes and pop culture references on social media have indicators too. Early this year, someone commented on Tik Tok that Ed Sheeran, the famous singer, was “kind of cool now”. Sheeran responded, “a recession indicator.”

You may be asking yourself if all this technical recession talk really matters? Sure, it’s important to measure these things, but the general point is this: For many searching for work, or still reeling from three years of high inflation, it may ‘feel’ like a recession regardless of what economists say. 

It’s still popping…but a bit slower now

2025 population stats were released this week! No need to rehash in detail, as we did a two part series on it this week: 1) A tally of Alberta’s population and migration flows 2) An age breakdown of migrants, showing that Alberta has been a magnet for youth. 

For those short on time, here’s the bottom line. Alberta’s population has exploded in the last three years, growing persistently faster than other provinces due to interprovincial inflows. Affordability is a bigger factor this time around than past migration booms. Population growth is slowing, and will continue to slow due to fewer temporary residents, but will still grow faster in Alberta than the rest of Canada.

Tour of Northern Alberta - A lesson in resiliency

My travels this week took me to Jasper and Fort McMurray, where I spoke at two Chamber events and an event for ATB’s Women (‘W’) in business. On that journey, I learned a valuable lesson in community building and resiliency. Both communities have emerged from devastating wildfires, along with some major economic disruptions (COVID, oil price shocks). 

In Jasper, about a third of the town was destroyed in July 2024. Temporary housing abounds, and the rebuild is underway. I was taken aback by the number of visitors - several tour groups were taking in the stunning scenery.  

At the event, ‘building back better’ was the theme. To be sure, there are challenges with construction delays and finding enough housing and staff, not to mention the emotional toll such an event takes. Yet, as I mingled with community and business leaders, what struck me most was not the emphasis on the struggle, but talk of opportunity. For such a humble place, it exudes confidence that it will emerge stronger than ever. 

Not there yet

While it’s great to see visitors returning to Jasper, it is still not business as usual.

On the statistical surface, it may seem like things are back to normal. Attendance at the Jasper National Park is now tracking 2023 pre-fire levels, after falling to effectively zero in the summer of 2024.  

But that data includes many same-day visits, and non-visitor reconstruction related traffic. It’s hard to quantify, as it depends on the tourism operator, but business (i.e. dollars spent) from visitor traffic is still well below normal.

The hotel data confirms this. Occupancy rates are running strong at 90%+ for late August/early Sept, which is close to 2023. But that mostly reflects fewer rooms available, which are sitting roughly a-fifth below normal due to a combination of the fires destroying hotels and planned renovations on intact buildings.

Soon after the fires, our preliminary estimate was a hit to tourism spending in excess of $200M in the Jasper area in the third quarter alone.

As the town rebuilds, there’s no doubt tourism spending will surpass pre-fire levels. The town is too charming and the scenery too stunning for that not to be the case. 

One opportunity I highlighted is capturing more of the B.C. visitor spending by Albertans. This may surprise you, especially if you’re not one the B.C.-bound travellers, but Alberta runs a massive travel deficit of $1.2 billion with B.C. (as of 2019, latest available). That is, Albertans spend $1.2 billion more visiting B.C. than British Columbians spend visiting Alberta. How can places like Jasper capture more of that B.C. spend?  

Fort McMurray is also no stranger to adversity. More than 2,500 living units were destroyed in the fires of May 2016, and at one point over 80,000 residents were evacuated.  

The economy has gone through major changes: an oil sands investment boom of the mid 2000s and early 2010s, followed by the 2015-16 recession, COVID and the aftermath of the wildfires and 2020 floods. 

Today, the region remains an economic powerhouse not only for Alberta, but for Canada. The Wood Buffalo region accounts for about 0.2% of Canada’s population. Yet oil is Canada’s top export, and the vast majority of Canada’s oil production comes from the oil sands (see Chart of the Week).* Median household incomes (couples) are over $200K/year, highest among any location tracked by Statistics Canada and nearly double the national average. How’s that for punching above your weight?  

In the oil sands, the focus is on sustaining and optimizing existing facilities as opposed to new big ‘greenfield’ projects, with capital spending well below its 2014 peak. 

On production, S&P Commodity Insights has continued to increase their forecasts, now expecting the oil sands production to increase by 500k/d to 3.9M/d by 2030 due to debottlenecking and optimization. These are roughly consistent with the Alberta Energy Regulators (AER) forecasts, though the AER assumes a steady increase past 2030.

Some mythbusting on oil sands costs. Historically considered a high cost method of extraction, recent research, again by S&P Global Commodity Insights, indicates that break-even operating costs (including diluent purchase) range from only US$18/bbl to US$45/bbl on a WTI equivalent basis, with an average of US$27/bbl. It’s true that oil sands have high upfront capital costs, but once operational they are a relatively low cost source, even more competitive than U.S. shale as we recently explored.

During the boom, Fort McMurray real estate prices surged to the highest in the province. Now prices are more affordable than the provincial average, which is itself propped up by rising prices in Calgary. Housing is now relatively affordable in Fort McMurray due to the combo of below average house prices and way-above average incomes.

Post fires, the big rebuild in 2017-2018 led to a spike in housing starts in the region. Since then, starts have fallen and stayed pretty flat, corresponding to a leveling off in the population. The population jumped in 2024 alongside the rest of the Alberta population, even surpassing its previous peak in 2014. Medium projections by the Alberta government are that Fort McMurray’s population will grow just under 0.5% per year over the next decade.  

* According to the Canadian Energy Regulator, Alberta’s exports of heavy oil (primarily oil sands) were 3.1 million b/d, or nearly three-quarters of the 4.2 million b/d of Canadian oil exported in 2024.

Answer to the previous trivia question: The largest Crown Corporation in Canada (as of 2024 revenue) is Caisse de dépôt et placement du Québec (Quebec Deposit and Investment Fund).

Today’s trivia question: What is the name for the Calgary area in the Blackfoot language?