In this week’s The Seven… 

• 2026 theme song - In development
• Alberta’s labour market in 2025 - More jobs, more people
• Not as bad as we thought - Canadian productivity
• Pass through - Development charges, and their impact on home costs
• Survey says - Majority support a pipeline
• Next week: Our new forecast for Alberta
• Interesting Fact: Deal or no deal?
• Chart of the Week: Canadian LNG Exports reach liftoff

“A long December and there's reason to believe

Maybe this year will be better than the last

I can't remember the last thing that you said as you were leaving

Now the days go by so fast”

-”Long December,” Counting Crows

Is it seriously December 5th? Our family’s Christmas tree is up, though I still haven’t got around to setting up Frosty the Snowman on the front lawn.

All this reminds me that we should probably put out our 2026 Economic Outlook soon. That will happen next week… stay tuned.

I find most folks want to hear less from economists this time of year (something about us killing the holiday vibe). But bear with us, as we deliver our final insights of the year.

As the Counting Crows say, there is good reason to believe the coming year will be better than the last. We finish the week with another surprisingly strong jobs report, and some upward Canadian productivity revisions.

2026 theme song - In development

If you were to pick an economics theme song for 2026, what would it be? This is currently a heated discussion among ATB Economics (we’re also debating more serious stuff like our final call for population and employment growth).

We won’t spoil the surprise, but we know that the theme song needs to be less about the world around us and more about us. That’s right, the focus is on Canada’s ability to execute on promises like building big things faster, freeing internal trade and exporting overseas.

Advancing on these issues would check two boxes: 1) addressing the pre-Trump 2.0 issue of languishing investment and productivity; and 2) addressing the new challenge of U.S. protectionism - or the “rupture” in the U.S.-Canada trade relationship as PM Carney calls it.

Forecasts are always tough, but this one has an unusual ‘domestic’ wrinkle. We now see some upside if major projects proceed, but also see the potential for ‘execution risk’ should nothing happen and trade tensions continue. As always, we’ll choose the middle of the road with some low/high scenarios.

Alberta’s labour market - More jobs, even more people

We won’t rehash the details of today’s strong jobs report for Alberta - you should have already received those in your inbox. If not, you can find them here.

But taking a giant step back, and ignoring the less reliable monthly gyrations, we observe the following Alberta labour themes so far this year:

Solid job growth (given the circumstances). We’re still missing the December data, but it looks like 2025 average employment growth will come in at 2.9% in Alberta, leading all provinces and far outpacing the national average of 1.5%.

Unemployment remains elevated as jobs struggled to keep up with even faster population growth. That changed last month, with the surge in job growth, but the average unemployment this year was an elevated 7.2%. 

Skills mismatches abound. “Mark, you tell me we have all these people moving to Alberta, but I still can’t find workers?” I received a version of that question all year, mostly at construction conferences. The answer to that question is skills mismatches - we have lots of people, but not necessarily the right people for the job. Case in point: The job vacancy rate (share of vacant positions to jobs required) is 5.8% in the specialty construction trades, nearly double the overall rate (as of Q2). This ‘friction’ in the labour market will take some time to smooth out.. 

Looking to 2026, we see the unemployment rate holding below 7%, mostly due to a cooldown in labour force entry as opposed to a pick up in hiring.

Productivity - Not as bad as thought, but still not great

We’re on a roll bringing the holiday cheer - economics edition.

Not only did jobs come in better than expected, we also found out Canada’s productivity performance is not as bad as we thought.

Statistics Canada updated its Gross Domestic Product (GDP) figures based on new benchmark data and revised estimates of business investment and service exports.

As a result, labour productivity (output per hour worked) for the business sector over the past few years has been revised higher.

The revisions are significant. Stats Can now says business sector labour productivity grew 0.7% last year (vs. 0% previously), and shrank by 1.4% in 2023 (vs. -2.1% previously).

Good news, but let’s not get ahead of ourselves. The broader story about Canada’s lacklustre productivity, especially compared to the U.S., doesn’t change. It’s something that will need to be turned around. Carolyn Rogers, Senior Deputy Governor of the BofC, called Canada’s productivity crisis an “emergency.” If asked now with the new data, I’m sure she’d still say it’s very urgent.  

We built this city…on development charges

‘Build, baby, build’ is the new mantra in Canada. And it doesn’t just apply to major projects like copper mines and LNG facilities. The federal government also wants to nearly double annual housing starts to restore housing affordability.

But a number of challenges stand in the way. One is labour - who is going to build all this stuff? Builders often argue that development charges are too high, with the cost ultimately passed onto the home owner.  

A new report by Canada Mortgage and Housing Corporation shows that development charges (fees for funding municipal infrastructure like roads and water) are a major contributor to the cost of new housing, representing 8% to 16% of a new condo's price in the City of Ottawa (outside the Greenbelt) and the City of Markham, respectively.

As for Alberta, comparisons are clouded by methodologies. While many Canadian municipalities elsewhere charge on a per-unit basis (per house or per apartment), Alberta municipalities generally structure their fees on a per-acre basis. As such, this report doesn’t provide a comprehensive read of how Alberta fares.

However, a previous study by the Altus Group for the City of Calgary estimated that development charges, on an equivalent per hectare basis, are generally lower in Alberta than Ontario and B.C. across housing types, with Calgary coming in higher than Edmonton.

Survey says -  Majority of Canadians support a pipeline

According to a recent Angus Reid Institute survey, 60% of Canadians support an oil pipeline from Alberta to the B.C. coast running through northern B.C. while 25% oppose the idea (15% were not sure or couldn’t say). In B.C. support is 53% (37% opposed) while Alberta support is 74% (16% opposed).