British Columbia
The B.C. economy still looks subdued in mid-2026, though the latest data suggest conditions may be stabilizing rather than deteriorating further. After several weak months, employment rose by 25,000 in May, while the unemployment rate held at 6.8%, pointing to a labour market that has stopped sliding for now but remains noticeably softer than last year.
Household spending also appears restrained rather than declining. Retail sales in B.C. edged up 0.5% in March, but the broader national report showed weaker core sales and a decline in volumes, suggesting that consumer momentum remains fairly modest once higher prices are taken into account.
The housing market remains a key area of softness. Recent BCREA analysis points to subdued sales, active listings at their highest level since 2015, and modest downward pressure on prices this year, particularly in some of the province’s more expensive markets. While improved affordability should help keep activity from weakening much further, buyers are still contending with an uncertain economic backdrop and a less confident labour market.
Taken together, the B.C. economy appears to be finding a floor, but growth is still likely to remain modest and uneven through the rest of 2026.
Alberta
Alberta remains the province best positioned for growth in 2026. The positive forecast is driven by high oil prices and better-than-expected economic results in late 2025. Growth is expected to reach nearly 2.5% in the region in 2026, significantly higher than the projected national rate.
The conflict in the Middle East is a major driver for Alberta’s economy. The WTI oil price averaged US$104 per barrel in May, well above the levels projected in the February provincial budget. This premium is expected to translate into a significant increase in government and corporate revenues. Oil production remains at high levels, averaging 4.17 million barrels per day over the first four months of 2026.
That said, the price increase is not translating into a production boom. Companies are maintaining financial discipline, keeping capital expenditures stable in the absence of clarity on how long the price surge will last. Drilling activity confirms this. The number of active rigs stood at 136 at the end of May, with 52% of the drilling fleet in operation—an improvement from April but still reflective of caution, according to the Canadian Association of Energy Contractors. Meanwhile, the Trans Mountain pipeline expansion is paying off, as oil exports to Asia reached a record high of over $9 billion in 2025.
The labour market in Alberta rebounded in May. Employment rose by 14,000 (+0.5%) and the unemployment rate fell to 6.6% as the province recovered from a sluggish April. Since the start of the year, Alberta has created about 40,000 jobs, and year-over-year employment growth of 4.1% leads all provinces. Average weekly wages are rising faster than the national average and are well above inflation. However, retail sales remain volatile: after falling 1.9% in February, they rebounded 2.6% in March, largely driven by higher gasoline prices—a sign that underlying consumer demand remains fragile.
Saskatchewan
As a resource-driven province, Saskatchewan’s economy is well positioned to grow above the national average in 2026. Real GDP growth could reach above 2%, placing it just behind Alberta among the provinces. The ongoing closure of the Strait of Hormuz continues to support oil, gas and mining activity, with oil prices well above the province’s conservative budget assumption.
The mining sector remains the province’s growth engine. In 2025, total mineral sales reached $12.8 billion (+19%), led by potash ($9.3 billion, +18%) and uranium ($3.2 billion, +24%, a record). The momentum has carried into 2026, with April potash sales up 25.9% year-over-year and production up 11.1%. Uranium sales, however, fell 26.0% in April on planned maintenance shutdowns.
On the investment front, NexGen received its construction licence from the CNSC in March 2026 and will begin building the Rook I uranium mine this summer, the largest development-stage uranium project in Canada. Meanwhile, BHP’s Jansen potash mine, now 75% complete, has pushed its first production to mid-2027 but recently signed rail transportation agreements with CN and CPKC to connect Saskatchewan potash to global markets.
The Middle East conflict is also driving up nitrogen fertilizer costs for farmers. Urea prices, while retreating from their spring peaks, remain elevated compared to pre-conflict levels. Many farmers had stocked up before the conflict escalated, according to the Canadian Federation of Agriculture. Manufacturing rebounded sharply in March, with sales surging 20.6% month-over-month and up 18.3% year-over-year. Despite this, exports to the United States remain under pressure from tariffs.
The labour market weakened further in May. After losing 4,000 jobs in April, the province shed an additional 6,100 jobs (-1.0%), and the unemployment rate rose to 6.2% (up from 4.3% a year ago). Saskatchewan nonetheless ranks third lowest among the provinces, just below the national average of 6.6%. The labour force, however, reached a record high in May, a sign that population growth will continue to support consumer spending over the medium term if employment follows.
Manitoba
Manitoba’s economy is expected to grow moderately in 2026. The provincial budget projects real GDP growth of 1.3%, slightly above the national average, though BDC’s forecast is more conservative at 1.0%.
The budget included several measures to ease the burden on households. Starting July 1, the province will eliminate the 7% PST on all grocery items sold in grocery stores, including prepared meals, soft drinks and snacks.
The labour market was largely flat in May. After a strong rebound in March (+11,000 jobs) and a slight decline in April, employment was essentially flat in May (+300). The unemployment rate rose to 5.5%, as new entrants joined the labour force while employment stalled. Year-over-year, however, employment remains up 2.6%.
Manufacturing showed signs of recovery. After falling 5.5% through February, manufacturing sales rebounded sharply in March (+9.4% month-over-month to $2.5 billion), bringing the year-to-date decline to just 0.3%. The agri-food industry accounts for nearly a third of the province’s total manufacturing sales, and while the agreement reducing Chinese tariffs on canola was welcome news, international exports remain the weak spot. Total exports fell 27.2% (on a nominal basis) in the first quarter, with exports to the United States down 34.3%, largely due to a sharp drop in pharmaceutical shipments and continued tariff pressure. High energy prices could also drive-up transportation costs, a key risk for Manitoba’s economy which relies heavily on domestic trade.
Ontario
Employment continued to grow in Ontario, with nearly 42,000 jobs added in May, following an increase of 42,500 in April. After a very slow start to the year, employment has risen sharply in recent months.
The construction sector is regaining momentum thanks to growth in the non-residential sector, driven by the acceleration of infrastructure projects by the Ontario government.
Employment in the manufacturing sector is also improving, driven by an increase in exports in recent months. Furthermore, the sharp decline in employment in the education sector appears to be stabilizing. After the initial shock of the significant drop in the number of international students, the sector seems to be in a better position.
Finally, the retail sector remains under pressure: employment continues to decline, despite growth in retail sales. It appears that the rise in oil prices over the past two months is putting significant pressure on this sector.
Quebec
Quebec’s economy continues to navigate a challenging environment and much of the sluggishness stems from a difficult trade environment. Exports declined 13% in Q1 2026 under the weight of U.S. tariffs on steel, aluminum, lumber, and autos. A 19% rebound in March offered some relief, but overall trade levels have yet to recover to pre-tariff norms.
Manufacturing was the main drag on Québec’s economy in the first two months of 2026, with output declining by 4.0%, making it the largest contributor to the overall decrease in real GDP.
May’s employment data brought some welcome relief: employment increased by 13,200 and the unemployment rate dropped to 5.6%. However, the labour market is still soft: employment levels remain below last’ years average and have yet to recover.
Despite these pressures, other sectors supported growth, in the first two months of 2026, including finance and insurance (+3.0%), retail trade (+2.6%), wholesale trade (+2.2%), and real estate and rental and leasing (+1.5%).
Quebec households have shown relative resilience so far, supported by lower indebtedness and high saving rates that continue to cushion consumer spending. Retail sales were positive early in the year before dipping 0.8% in March.
Looking ahead, below-potential growth is expected to persist as trade uncertainty and a cooling labour market continue to weigh on activity. Growth is expected to reach 0.7%, placing the province among Canada’s slowest-growing economies. For now, government spending and household consumption remain the province’s main engines of growth, helping it avoid a recession.
Nova Scotia
Nova Scotia’s economy is anchored by solid domestic fundamentals. Retail sales rose 3.3% in 2025 and posted a 2.9% increase in the first quarter of 2026, while non-residential investment surged 10.7% in Q1 2026.
Still, the province is adjusting after several exceptional years. Real GDP growth is estimated to have slowed, as population growth moderated from a record 2.8% to just 1.0%. Growth is expected to reach 1.3% in 2026 and exceed the national average.
Headwinds persist on the trade and labour fronts. Exports declined 3.4% in Q1 2026 amid ongoing tariffs, and the labour market took a step back in May. Meanwhile, the unemployment rate surged to 7.1% — its highest level since early 2025 — driven by a sharp expansion of the labour force as more Nova Scotians entered or re-entered the job market.
Nova Scotia is planning strategic investments in healthcare, housing, defence, and clean energy, alongside a Fiscal Stability Plan to slow expense growth.
In short, domestic spending and investment provide a solid floor, even as Nova Scotia navigates softer trade and a more moderate growth path.
New Brunswick
New Brunswick’s economy is expected to grow by 1.2% in 2026, a modest pace as external headwinds and a cooling labour market temper an otherwise resilient domestic backdrop.
On the consumer side, spending continues to provide a solid foundation. Retail sales grew 4.8% in 2025 and have trended upward since November, with March 2026 posting another 0.7% monthly gain.
New Brunswick’s manufacturing sector staged a strong rebound in March 2026, but the broader picture remains mixed: sales through Q1 2026 were still weighed down by a weak January, and ongoing trade uncertainty.
The labour market remained soft in May, failing to participate in the broad national rebound. Employment edged down by roughly 400 jobs (-0.1%) to 408,000, while the unemployment rate held steady at 7.2%.
The province is leaning into deficit spending to sustain key priorities which will support growth. Resources are being channelled into healthcare, education, and syupport of industry.
Resilient consumer spending and a rebound in trade are keeping the economy afloat, but slower population growth and a softening labour market point to another year of moderate growth.
Prince Edward Island
PEI’s economy is expected to grow by 1.5% in 2026, outpacing Canada’s projected growth, as resilient domestic demand helps offset persistent trade pressures.
Consumer spending remains a bright spot. Retail sales continued to rise in early 2026, with Q1 posting a 4.0% increase, a sign that households are confident and ready to spend. A stable job market has been supporting this momentum. In fact, the labour market bounced back in May, as employment rose by an estimated 1,500 jobs and unemployment dipped to 6.7%.
Trade, however, has been under significant pressure. Exports declined 10.5% in Q1 2026, as trade with both the U.S. and China weakened. That said, the new agreement on trade with China is expected to provide some relief, and volumes should gradually pick up in the coming months.
Solid consumer activity and a relatively stable job market are keeping the province on a healthy growth path, even as trade headwinds remains a key challenge.
Newfoundland and Labrador
Newfoundland and Labrador is poised to be one of Canada’s top-performing provinces in 2026, with GDP expected to grow by 2.0%, well above the national average.
The province continues to benefit from a favourable commodity environment, boosting its exports. The rebound in the gold sector—with the launch of the Valentine gold mine and the restart of the Hammerdown project—is supporting diversification, marking the province’s first international gold shipments in over two decades.
The fishery sector also registered a record $1.3 billion in landed seafood value last year.
Meanwhile the labour market seems to be easing, a slight cause for concern. Employment decreased by 0.5% in May but levels remained close to where they were in December last year. Consumer spending gained traction, however: retail sales jumped to a new peak in March, supported by decent employment and commodity-driven confidence.
Strong commodity prices, surging exports, and solid consumer spending are powering a good year for the province, even as demographic headwinds remain longer-term concerns.
