Edmonton — Alberta’s economy continues to weather the geopolitical storm better than most, growing faster than the national economy during the tariff shock of 2025. As the country’s largest oil producer, it is expected to be the growth leader in 2026 following the recent surge in oil prices stemming from the war in Iran.   

ATB Financial’s Economic Outlook released today projects Alberta’s real GDP will grow by 2.6 per cent in 2026, well above the 2.1 per cent projected in December before the Iran war disrupted global markets. By comparison, the national economy is expected to grow by just 0.8 per cent this year.

Beyond the energy sector, this economic momentum is being supported by persistent population growth. Driven by relative housing affordability and an improving labour market, a steady influx of new residents is leading to more catch-up construction and momentum on consumer spending than elsewhere in the country. 

Yet the outlook cautions that this is not a classic energy boom as energy producers are maintaining capital discipline amid ongoing uncertainty over prices, regulations, and future pipeline capacity. On the ground the reality remains complex: households are navigating a steep cost of living, youth unemployment remains high, and hiring is being held back as businesses await clarity on the Canada-United States-Mexico Agreement (CUSMA) which is scheduled for review this summer.  

"Alberta is moving like a fast car restricted to the slow lane," said Mark Parsons, Vice President and Chief Economist at ATB Financial. "The momentum is clear, with Alberta leading in job gains and consumer activity. However, the trade conflict, ongoing cost of living pressures, and transportation infrastructure constraints are keeping the province from hitting top gear." 

Key highlights:

• The Hormuz Premium vs. Capital Discipline: The closure of the Strait of Hormuz has pushed West Texas Intermediate (WTI) price projections to an average of US$84 per barrel this year. Although this surge is driving up provincial revenues and nominal GDP, energy producers are proceeding cautiously before unlocking major capital expenditures.
• Impact of Energy Expansion: Economic modeling shows that major pipeline expansions and carbon capture projects linked to the Canada-Alberta memorandum of understanding could add 5.1 per cent to the provincial GDP between 2027 and 2035, and provide a meaningful boost to the national economy.
• Retail Resilience Amid Household Strain: Alberta leads the country in consumer spending, posting a 5.5 per cent year-over-year jump in retail sales during the first quarter of 2026—more than double the national average. Despite this, the rising cost of living and past price and interest rate increases have placed a financial strain on many households. 
• Diversification: Outside recent developments, the longer term story is that Alberta’s economy is benefiting from growth in a broader range of sectors than in the past. While upstream (e.g., extraction) investment remains well below peak levels, spending on downstream activities (e.g., petrochemicals, hydrogen, food processing) continues to trend higher. Other emerging growth sectors include tech, tourism, critical minerals, aviation, and logistics. 

"The top-line numbers tell a story of provincial economic resilience, but the day-to-day reality is that not everyone will feel the benefits," Parsons noted. "Surging fuel and input costs are squeezing both family and business budgets. A growing job market and higher oil prices are providing a cushion, but structural improvements in investment and productivity remain vital to shifting the Alberta and Canadian economy into a faster lane."

For the full report, read the complete Alberta Economic Outlook.