Oil prices lift revenues, but capital discipline holds
The conflict in Iran and the closure of the Strait of Hormuz have pushed ATB’s West Texas Intermediate (WTI) price forecast to an average of US$84/bbl for 2026, up sharply from US$61 in the December forecast. Alberta’s nominal GDP is expected to rise 8.8% this year as a result.
Despite the revenue windfall, energy producers remain in a “wait and see” posture on major capital expenditures, citing uncertainty over additional oil transportation capacity and the temporary nature of elevated prices. The WTI price is forecast to retreat to an average of US$70/bbl in 2027 once the Strait of Hormuz is assumed to have reopened.
Pipeline uncertainty caps upside
The energy sector’s caution is partly tied to unresolved pipeline questions, including a proposed new oil pipeline to the British Columbia coast under the Canada-Alberta memorandum of understanding. ATB’s modelling suggests major pipeline expansions combined with the Pathways carbon capture project could add an average of 5.1% to Alberta’s real GDP between 2027 and 2035, though those outcomes have not been built into the base case forecast.
Population growth sustains consumer activity
Alberta continues to attract new residents, albeit at a slower pace than recent years, with population projected to grow 1.1% by July 1, 2026. That demographic momentum is flowing through to retail and construction activity. Alberta leads all provinces in retail sales growth, with annual growth projected at 4.5% for 2026. Employment is forecast to grow 3.3%, with the unemployment rate declining to an annual average of 6.6%.
Household strain and trade risks remain
The report cautions that headline growth figures do not reflect the experience of all Albertans. Many households remain under financial pressure from elevated living costs, while the youth unemployment rate remains above its historical norm. Business hiring intentions are also constrained by uncertainty ahead of the CUSMA review this summer.
