Canada’s economy beat expectations in the latest GDP reading , and Alberta was likely a major driver of that growth.
Statistics Canada doesn’t provide monthly provincial GDP numbers, but Charles St-Arnaud, an economist at Edmonton-based Servus Credit Union, said the province probably led the way as Canada’s gross domestic product expanded 0.5 per cent in April from the month before, beating economists’ forecasts.
“For Alberta, the details available in the report suggest that economic activity was stronger than in the rest of the country in May, thanks to the strong rebound in oil and gas extraction,” St-Arnaud said.
The 3.7 per cent rebound in oil and gas extraction recorded in the month came mostly from unconventional sources, with almost 100 per cent of that located in Alberta, he said.
“Clearly this suggests that on the month, Alberta was way better than the rest of the country, but it’s also a payback from the weakness we had in the month of March,” St-Arnaud said.
Nationally, population shrunk slightly, but it’s still growing in Alberta, which is also working in the province’s favour.
“ Population growth is kind of your baseline growth,” he said.
Alberta has often been a national leader in growth. In 2025, the province’s economy grew 2.6 per cent, beating national growth of 1.6 per cent, according to his data.
Canada’s rebound in April should quiet recession talk, but details behind the headline numbers suggest that interest rate cuts, not hikes, are the more likely surprise ahead, said Douglas Porter, chief economist at Bank of Montreal.
“The reality is that output is still up only a little more than one per cent from a year ago, which is below potential and still more consistent with monetary policy biased to ease rather than to tighten,” said Porter said Tuesday after the data was released.
At the start of the Iran war, markets priced in as many as three hikes by the Bank of Canada this year on concerns that high oil prices would hike inflation.
Since the U.S. and Iran brokered an apparent moratorium, those bets have evaporated. As of June 30, there was a slightly more than 60 per cent chance of a rate increase at the Bank of Canada’s final announcement for 2026, according to Bloomberg rate swap data.
BMO’s official call is for the central bank to hold rates at 2.25 per cent until the end of 2027, but Porter’s feeling is if something goes awry with the economy, a cut looks more appropriate.
“If … something happens that we didn’t foresee, we just think it’s more likely that the Bank of Canada will find the need to cut interest rates rather than raise them,” he said.
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Canada’s real gross domestic product grew by 0.5 per cent in April, marking a strong start to the second quarter of 2026 that was slightly higher than economists’ expectations.
Gains were mainly driven by the mining, quarrying, and oil and gas extraction sectors, which grew by 2.9 per cent month-over-month in April, Statistics Canada said Tuesday.
This is the largest growth rate for the sector since February 2024 and “more than offsets” March’s 1.4 per cent contraction, officials said.
Read the full story here.
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Today’s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff and Bloomberg.
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Posthaste: This province fuelled Canada's GDP beat and is expected to keep leading growth nationally
2026-07-02 12:22:59
