“This is a broken relationship,” said Stéfane Marion, Chief Economist at the National Bank of Canada, with regards to Canada’s relationship with the United States. “We need to address our economic sovereignty.”  

Marion’s stark words, spoken at BILD Edmonton Metro’s inaugural Economic Forecast Dinner, set the tone for the evening. Alongside Catherine Rothrock, Chief Economist for the Province of Alberta, Marion addressed a crowd of over 200 members and municipal leaders, discussing Edmonton’s economic momentum and the strategic steps required to navigate both fiscal and market challenges. 

However, it was the looming possibility of a trade war with the United States that dominated the conversation. 

Rather than sidestep the issue, Marion tackled it head-on. 

“A tariff war with the U.S. could shrink Canada’s GDP by six per cent, potentially driving us into a recession,” he warned. 

The imposition of a 25 per cent tariff on steel and aluminum imports had already sparked inflation concerns, pushing inflation expectations toward five per cent in February. Marion stressed the economic threat posed by such tariffs and predicted a recession if trade relations worsen. 

He posed a poignant question to the audience: “Who stands on guard for thee?” — a reminder of how Canada’s economic standing has faltered in recent years. Marion explained that while Canada’s GDP per capita remains stagnant compared to a decade ago, the U.S. economy has surged ahead. Manufacturing GDP per capita has dropped by 30 per cent, and Canada now plays a negligible role in the global supply chain. 

“When President Trump says we don’t need anything from Canada — outside of energy — he’s partly right. We are reliant on other parts of the world,” Marion punctuated. 

Marion also highlighted how Canada’s jobless rate for people aged 25 to 54 has surged. He pointed to the over 300,000 business regulatory requirements in Canada, which have reduced GDP by one per cent, investment by nine per cent, and employment by three per cent. 

But, while Canada’s outlook may appear grim, Alberta’s economy is faring better, with Rothrock offering a more optimistic perspective. 

“Alberta’s economy isn’t all doom and gloom,” she asserted. “The housing market remains strong, employment is on the rise, and consumer spending is supported by low interest rates and easing inflation.” 

She emphasized that the housing and energy sectors are the main drivers of Alberta’s economic activity. However, she also pointed to the challenges of population growth outpacing supply. Despite a tight construction labor market, Alberta is pushing forward to meet the demand. 

“The housing market in Alberta is still hot, with sales up and inventory down,” Rothrock explained. 

While caution is needed, Rothrock highlighted Alberta’s success in growing non-residential building investment, which has risen by 4.3 per cent. More impressively, institutional and government building investment surged by 15.4 per cent, and industrial building investment skyrocketed by 35 per cent. 

Alberta’s affordability advantage is also a notable factor. Housing starts in the province have increased by 35 per cent from December 2023 to December 2024, with Edmonton’s housing starts up by 69 per cent and Calgary’s by 35 per cent. 

Key Takeaways: 

• Alberta’s economy is showing solid growth, driven by the housing and energy sectors. Edmonton’s housing starts are increasing, and the construction industry is rising to meet demand. 

• Canada’s overcomplicated regulatory environment is hampering economic productivity. Governments must reduce red tape to boost economic output and job creation. 

• Focus should be placed on building economic resilience by investing in manufacturing and strengthening the industrial sector to maintain long-term growth. 

• In short, while the global outlook may be uncertain, Alberta’s economy, focusing on Edmonton in particular, is on a trajectory of resilience and growth — if the right strategic actions are taken. 

Thank you to our amazing sponsors: Legacy Heating and Cooling, Jai Homes, Doane Grant Thornton, Star Mechanical, Singh Builders, Travelers, and The Home Depot.

Written by Jason Syvixay