Here’s a labour market puzzle for a summer day: Why does Alberta’s unemployment rate currently exceed the national average despite leading the nation (by far) in jobs added over the past year?

For those who haven’t already cracked the case, let’s first look at the latest data from Statistics Canada’s monthly Labour Force Survey.

Employment: In the first half of 2026, Alberta employment rose by 90,700 over the same period last year, or 93% of the national increase. Another way to look at job growth is over the last 12 months. Using that time frame, Alberta accounts for 79% of Canada’s job gain. As we discussed last week, we haven’t seen that level of job outperformance since the boom of 2010-2014.

Unemployment: In the first half of 2026, Alberta’s unemployment rate has averaged 6.6%—an improvement over the 7% during the same time last year. However, over the last 12 months, Alberta’s unemployment rate has nudged up from 6.8% in June 2025 to 7% last month. That currently sits above the national rate of 6.5%.   

The answer to this ‘high job growth, elevated unemployment’ puzzle mostly comes down to demographics.

Alberta’s population is growing much faster than the rest of the country—fueled by interprovincial migration, natural increase, and a smaller decline in non-permanent residents.

This translates into more people being added to the ranks of the labour force (those working or looking for work) in Alberta than in any other province.

Another factor boosting Alberta’s labour force is the participation rate—the share of the 15+ population looking for work or working. That rate has risen over the last 12 months (by about 0.7 percentage points to 69.5% in June), but has played a smaller role than a rising population.

Bottom line: Alberta’s higher unemployment rate is not due to a lack of job creation. Quite the opposite—the province is out in front on employment growth.  Rather, it’s due to a faster-moving stream of new job seekers.

Technical aside: Demographics help solve today’s puzzle, but the story doesn’t end there. The massive swings in the population—caused by shifts in non-permanent residents—have created measurement challenges. Right now, there is a disconnect between the population growth in the quarterly population estimates and the Labour Force Survey, with the latter showing much faster growth. Eventually, these surveys will need to speak to each other, and there could be large revisions coming in one or both surveys (the LFS typically gets revised in January). This may change the absolute size of the population and employment gains. However, the impact on employment and unemployment rates should be minimal (as both denominator and numerator will shift). Revisions are also unlikely to change the story on Alberta’s outperformance.

Breaking even

Faster growth in the working-age population creates a higher ‘break-even’ job growth rate. Think of it as a hurdle you need to overcome to prevent the unemployment rate from rising.

That hurdle is higher—much higher—in Alberta because the population is growing faster than any other province in both level and percentage terms.

Other provinces have much lower hurdle rates with a flat, or even declining, population. Right now, hardly any job growth is needed to keep the unemployment rate flat in many other provinces. For example, in the three largest provinces of Ontario, Quebec and B.C., the labour force has been shrinking this year—a marked change from the previous two years.

Looking ahead - A lower break-even rate

We expect that slower population growth will eventually translate into lower unemployment as the influx of job seekers falls in line with the pace of job creation.

It’s for this reason that we expect the unemployment rate in Alberta to fall from current levels in the second half of the year—averaging 6.6%—even as job growth moderates.

Answer to the previous trivia question: Alberta produced the most potatoes last year at 27% of the national total.

Today’s trivia question: From 1976 to 2025, how many years was the labour market participation rate in Alberta higher than the national average?