Alberta’s economy entered 2026 on a positive, albeit tempered, note. While the province continues to outperform national economic indicators, the landscape has shifted. The onset of conflict in Iran and broader regional instability have forced a re-evaluation of the year’s economic trajectory, reminding us that global volatility often affects home in unexpected ways.

While rising oil prices and other macro trends point to overall economic growth, the trickle-down effect isn't immediate or uniform across the business sector. As we’ve highlighted, the spike in oil prices will boost energy producers and government revenues, but we expect oil and gas companies to stay disciplined with their capital spending. It’s not the same energy investment boom we’ve experienced in the past.

To help bridge the gap between headline data and the daily operations of Alberta’s SMEs, ATB Economics, in partnership with the ATB Entrepreneurial Growth team, has launched the inaugural Small Business Pulse report. This is just the start! We look forward to refining and improving based on reader feedback (a survey is included at the end of the report).

The report looks past the aggregate figures to explore the actual health of Alberta’s SME ecosystem. Along with my colleague Paige Ross, I break down three key pressure points currently impacting local businesses, paired with practical advice from Bontu Galataa, ATB Regional Advisor for Entrepreneur Growth, on how to navigate these challenges. In today’s Twenty-Four, we share a few of the highlights.

What is the sentiment of SMEs today?

Small and medium enterprises (SMEs) are a crucial component of Alberta’s economic engine, employing 60% of its private sector. However, small businesses are confronting a number of challenges. Since 2024, CFIB reports that more businesses have exited the market than entered in Canada, including here in Alberta. Businesses cite rising costs, regulatory and tax burdens, trade uncertainty, access to capital, and labour challenges. Despite this, Alberta’s business owners remain resilient. The CFIB Business Barometer rose to 58.4 in April (over 50 means more businesses expect stronger performance than weaker performance).  

While external shocks keep everyone on their toes, sentiment and data across a few key indicators vary in their response:

1. The labour market

Alberta’s unemployment rate has moderated to 6.5% in March 2026, down from 7.2% a year earlier, but labour shortages persist in some key sectors like construction and accommodation and food services. With federal caps on non-permanent residents and slower population growth, the pool of available workers is shrinking as the demand for them is rising, this can put upward pressure on wages, but this impact is likely to be modest.

2. Consumer spending

Alberta’s retail sector has remained resilient in the face of mounting headwinds, with revenues up 3.0% last year and growth in 2026 expected to come in around 4%. The decline in interest rates, a resilient labour market, and equity market gains have lent support. However Canadian consumer confidence is fragile—survey data indicates that all four key components—personal finances, job security, the national economy, and real estate—are trending below historical averages and consumers are reporting weaker discretionary spending plans. Moreover, a widening wealth gap means the bottom 40% of households continue to be squeezed by the cost of living, potentially weighing on discretionary spending.

One bright spot has been tourism; 2025 saw a record amount of visitor spending and January 2026 posted record international visitor numbers.

3. Input costs

While consumer inflation has moderated, indexes that track the prices manufacturers receive indicate that business costs haven’t followed. Industrial and raw input prices have accelerated in recent months, with the Iran war leading to a more pronounced spike. Average hourly wages also continued to climb, adding further pressures on operating margins.

Looking ahead

Alberta enters the second half of 2026 with a number of advantages: GDP growth outpacing the rest of the country and relatively low exposure to U.S. tariffs. Simultaneously, businesses are navigating the impacts of tariffs and the uncertainty that surrounds U.S. trade policy. GDP growth is positive, but it doesn’t erase the challenges created by elevated operating costs or fragile consumer confidence. As a result, businesses will have to find ways to adapt to the conditions.

Answer to the previous trivia question: Mexico is composed of 32 federal entities: 31 states and one autonomous capital city (Mexico City).

Today’s trivia question: How many small- and medium-sized businesses (i.e., those with between 1-499 employees) were there in Alberta as of December 2025?