ATB Financial projected real GDP growth of 1.9% in 2025 and 2.1% in 2026 despite negative effects of trade war
Alberta’s economy, long shaped by the fortunes of oil and global trade, was expected to grow faster than any other province in the next two years, according to ATB Financial’s latest economic outlook.
The report, “Hanging by a tariff thread: Alberta’s economy in 2026,” projected real GDP growth of 1.9% in 2025 and 2.1% in 2026, even as the province faced the fallout from ongoing trade disputes and a cooling labour market. The forecast echoed ATB’s June projections.
Trade tensions and their impact on Alberta's key industries
Alberta’s economy, heavily reliant on energy and agricultural exports, has felt the impact of the ongoing trade war in several ways. Tariffs and shifting trade policies have created uncertainty for key industries. For example, new Chinese tariffs on canola have directly affected Alberta’s farmers, making it harder to sell their crops abroad and putting pressure on farm incomes.
Meanwhile, global trade tensions have contributed to volatility in oil prices, which remains a cornerstone of Alberta’s economy. Lower oil prices, driven in part by weaker global demand and increased supply from Organization of the Petroleum Exporting Countries (OPEC), have led to reduced investment in the province’s oil and gas sector.
At the same time, Alberta has been somewhat shielded from the harshest effects of US tariffs, especially due to exemptions for goods compliant with the Canada United States Mexico Agreement (CUSMA). This has helped protect some manufacturing and export sectors, such as steel, aluminum, and autos, from more severe disruptions.
“Alberta’s economy is not immune to the effects of the trade war, but is expected to weather the storm better than other provinces. Looking beyond the current trade challenges, emerging industries like technology and tourism will support Alberta’s growth,” Mark Parsons, ATB Financial’s chief economist, said.
Challenges and opportunities in labour market and housing
However, the overall uncertainty caused by the trade war has weighed on business confidence and investment decisions. Companies have been more cautious about expanding or hiring, contributing to a softer labour market and higher unemployment.
“Many Albertans are feeling the weight of the economic slowdown,” Parsons said. “We’re seeing a disconnect where the economy is growing, but the job market can’t keep up with the number of job seekers. The potential for major projects in energy and infrastructure to create new jobs is a major upside, but we’re waiting for shovels to actually hit the ground.”
Despite these challenges, Alberta’s growing population, though not rising as quickly as before, kept demand strong, especially for new homes. Housing starts were set to hit a record high, with strong activity likely to continue next year. Better access to global markets for Alberta’s energy, thanks to projects like the Trans Mountain pipeline and new LNG export facilities, was also expected to lift export values.
“There was further evidence of a recovery taking hold in many housing markets across Canada in August,” RBC assistant chief economist Robert Hogue said in a new report. “But local price trends still varied considerably with declines continuing in affordability-challenged areas where inventory has piled up.”
Meanwhile, overall Canadian housing starts failed to pick up pace in the first half of 2025 with contrasts emerging between key cities, according to the latest Housing Supply Report from Canada Mortgage and Housing Corporation (CMHC).
