High oil prices could turn $9.4B Alberta deficit into $6B surplus: report

Alberta's legislature in Edmonton is seen on March 23, 2026. (Sean McClune / CTV News Edmonton)

A new report on the Alberta economy suggests the province is continuing to lead the country in growth, but factors outside its control continue to influence the trend.

The Business Council of Alberta (BCA), in its spring economic snapshot, says the province is benefiting from high energy prices, but the situation could change with little warning.

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The BCA said the conflict in the Middle East is the top issue affecting much of the world’s economy, while inflation and tariffs also put pressure on economies, including Canada’s.

However, Alberta is a “genuine exception,” the report said.

“Because of Alberta’s role in providing most of Canada’s energy exports, the province’s outlook is on a different path than the rest of the country — its economic outlook improved after the Middle East conflict began. BCA economists agree with several recent bank forecasts that indicate the provincial economy is now expected to grow by 2.7 per cent this year, up from ~2 per cent anticipated before the war, largely due to higher energy prices,” the BCA said.

“Higher oil prices have increased energy sector confidence from a five-year low and could push production beyond recent historic highs, while improving the province’s fiscal picture.”

The BCA says those high oil prices, if sustained, could change the province’s fiscal outlook from a projected $9.4-billion deficit into a $6-billion surplus.

‘Not without risk’

While Alberta’s projected growth is good news, the BCA says exterior forces could change the province’s fortunes.

“The situation in the Strait of Hormuz, global oil demand, CUSMA negotiations, and the provincial referendum in October each introduce uncertainty that is largely beyond the province’s control,” the BCA said.

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According to the snapshot, more than half of Albertans (56 per cent) believe the province economy is falling while just 43 per cent of Alberta think their own financial situation is “good.”

“In addition, oilpatch employment has not kept pace with production growth, youth unemployment sits at 14.4 per cent driven largely by job losses in retail, and residential construction starts have eased from a 2025 peak of 65,000 to ~47,000 annually,” the BCA said.

“At the same time, major project investment is accelerating across Alberta with non-residential construction investment up 22 per cent year-over-year, with 68 per cent of the 532 major projects currently under construction being industrial or commercial. This momentum is expected to last even if energy prices decline.”

The BCA’s full report can be found online.