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Overview
Alberta is navigating stiff economic headwinds, caused by trade conflict and elevated economic uncertainty. Falling oil prices due to global oil supply exceeding demand and increased expenses, largely due to meeting public compensation, are impacting our bottom line. Alberta also continues to face pressure from a growing population, which increased 2.5% in the 2025 census year, topping 5 million.
Labour market conditions in Alberta remain soft, with unemployment stubbornly high, especially for young people. Overall, the unemployment rate is forecast to remain at 7.4% in 2025, with the rate easing to 6.9% in 2026. Outside the energy sector, economic uncertainty is pushing many businesses to delay or reduce investment plans. The agricultural and manufacturing sectors are also facing challenges due to the trade conflict and slower global growth.
Alberta has shown some resilience in the face of these challenges. Alberta’s real GDP is expected to lead Canada this year, forecast at 2.1%, up 0.3 percentage points from budget. Increased demand for public services is also boosting hiring in services industries, including health care and education sectors. New housing construction remains exceptionally strong across the province, with housing starts expected to average 50,000 units this year, the fastest annual pace on record.
Resources
Population growth
Alberta’s population growth is forecast to moderate from 2.5% in the 2025 census year to 1.1% (or roughly 55,000 people) in the 2026 census year.
Energy price and economic assumptions
Table 1. Fiscal year assumptions for energy prices
| Fiscal year | 2025-26 Budget | Q2 Forecast | Change from budget |
|---|---|---|---|
| WTI (US$/barrel) | 68.00 | 61.50 | (6.50) |
| Light heavy differential (US$/barrel) | 17.10 | 11.30 | (5.80) |
| Exchange rate (US¢/Cdn$) | 69.6 | 72.3 | 2.7 |
Table 2. Economic assumptions
| Calendar year | 2024 Actual | 2025 Budget | Q2 Forecast | Change from budget |
|---|---|---|---|---|
| Real GDP (%) | 3.0 | 1.8 | 2.1 | 0.3 ppts* |
| Nominal GDP (%) | 5.3 | 1.2 | 1.7 | 0.5 ppts* |
| Employment (thousands) | 2,519 | 2,567 | 2,579 | 12 |
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.