Overview
Stormy skies are on the horizon for Alberta’s economy after ending last year on a solid footing. Last year ended with higher employment gains than expected and oil production hit a record of 3.4 million barrels per day. Non-residential building investment also increased, led by industrial factory expansions. However, the stark shift in U.S. trade policy towards stronger protectionist measures, mainly in the form of tariffs, puts a damper on the 2025-26 outlook.
Alberta’s government is taking a cautious approach to Budget 2025 due to the high risk of a Canada-U.S. trade conflict and its effect on ongoing trade uncertainty. This economic outlook assumes that Canada will face an average of 10% tariffs on energy products and 15% tariffs on all other goods. These U.S. tariffs, combined with expected retaliatory tariffs, are expected to dampen economic growth in Alberta, decelerating from 3% growth in 2024 to 1.8% growth in 2025 and 1.7% in 2026.
Resources
Population growth
Alberta’s population is forecast to grow by 1.4% in both 2026 and 2027, followed by 1.6% growth in 2028. This slower growth is due to the 2025-2027 Federal Immigration Levels Plan, resulting in an expected drop to about half the previous year’s net international migration. However, a strong net inflow of people from other jurisdictions in Canada is expected to shore up growth, thanks to Alberta’s comparatively stronger economic position from lower tariffs on energy exports and continued affordability advantage.
Energy price and economic assumptions
Table 1. Fiscal year assumptions for energy prices
| Fiscal year | 2025-26 | 2026-27 | 2027-28 |
|---|---|---|---|
| WTI (US$/barrel) | 68.00 | 71.00 | 71.50 |
| Light heavy differential (US$/barrel) | 17.10 | 16.50 | 15.60 |
| Exchange rate (US¢/Cdn$) | 69.6 | 71.9 | 73.8 |
Table 2. Economic assumptions
| Calendar year | 2025 | 2026 | 2027 | 2028 |
|---|---|---|---|---|
| Real GDP (%) | 1.8 | 1.7 | 2.1 | 2.2 |
| Nominal GDP (%) | 1.2 | 3.0 | 3.5 | 4.3 |
| Employment (thousands) | 2,567 | 2,609 | 2,659 | 2,713 |
More budget information
Find out what Budget 2025 means for you.
Revenue projections from taxes, transfers, investment income and resources.
Budget 2025 invests in the infrastructure families and communities need.
Summary of government spending according to Budget 2025.