Posthaste: Why Alberta might be too popular for its own good

Alberta has a lot going for it: less exposure to the United States tariffs that other provinces face, rising oil production from the Trans Mountain pipeline expansion and economic performance that topped its peers this year. “Solid consumer demand supporting spending and housing activity also leaves Alberta well-positioned compared to most provinces,” Salim Zanzana, an economist at Royal Bank of Canada, said in a report.

Despite all this good news, there’s a major “disconnect” in Alberta that hounds the province as it continues to record amongst the highest

unemployment rates  in Canada. The jobless rate in Alberta stands at 7.8 per cent, above the national average of 7.1 per cent and well above those of neighbouring

Saskatchewan and Manitoba, at six per cent and 6.2 per cent, respectively.

Alberta’s unemployment rate is just a tick under Ontario ‘s at 7.9 per cent, although the latter is far more exposed to U.S. tariffs because of its

automotive and steel/aluminum manufacturing plants. Ontario is grappling with U.S. tariffs of 50 per cent on steel and aluminum and 25 per cent on automotive components that are not compliant with the

Canada-U.S.-Mexico Agreement (CUSMA) . Alberta, on the other hand, faces 10 per cent duties on energy exports, unless they are compliant with the CUSMA.

Unemployment pressures are even worse for Alberta’s workers aged 15-24, who face a

jobless rate of 14.7 per cent compared with 13.5 per cent in Canada. In Calgary and Edmonton, the jobless rates clock in at 18.3 per cent and 18.5 per cent, respectively, for this cohort.

That’s a problem for Alberta since it is a relatively young province, with the second-lowest median age — 38.1 — in Canada.

Zanzana attributes Alberta’s struggling job market to a multi-year wave of

immigration and interprovincial migration that has swelled the number of workers and young people heading there over the past years.

For example, net immigration jumped to levels well above the average recorded prior to the pandemic. The province also took in nearly 174,000 new non-permanent residents over the past two years.

“Interprovincial migration has also played a key role,” Zanzana said, adding that the province had chalked up 12 consecutive quarterly population gains as of the second quarter, leading its provincial counterparts.

Alberta has recently been a magnet for Canadians seeking affordability, especially in the

housing market , which has drawn priced-out home hunters from Ontario and British Columbia, Canada’s most expensive housing markets.

“The boom has been a key source of economic momentum, but it has also presented challenges for newcomers looking for work,” Zanzana said, adding that job creation has failed to keep up with the number of available workers.

Where does Alberta go from here? First off, the labour market in September improved from August, when Alberta’s unemployment rate stood at 8.4 per cent.

Zanzana doesn’t expect the unemployment problem to evaporate, but to start improving as federal immigration cuts take effect, something that is already showing up in Alberta’s

population numbers. But he thinks the province will remain a draw for other Canadians.

“However, we expect Alberta’s in-migration to remain relatively strong, supported, in part, by sustained interprovincial arrivals, which won’t entirely eliminate absorption challenges for job seekers,” he said.

Royal Bank is forecasting an unemployment rate for Alberta in 2026 of 7.1 per cent compared with a national average of 6.6 per cent.

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Today’s Posthaste was written by Gigi Suhanic, with additional reporting from Financial Post staff, Canadian Press and Bloomberg.

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