Calgary's Economic Outlook: Robust Job Growth Meets Housing Hurdles
Calgary sees strong employment and revised national productivity, but challenges in housing affordability and policy execution pose significant questions for 2026.
As 2025 draws to a close, a sense of cautious optimism for the year ahead permeates Calgary's economic landscape, with Mark Parsons, ATB Economics, noting "reason to believe" 2026 could bring improvement. This sentiment comes amidst robust job growth and upward revisions in national productivity, yet significant challenges, particularly in housing affordability and labour market dynamics, persist.
Economic Momentum and Productivity
Alberta's labour market continues to demonstrate resilience, with employment rising 4.2% year-over-year and the seasonally adjusted unemployment rate standing at 6.5%. While overall job growth is strong, ATB Economics highlights ongoing "skills mismatches" as workers struggle to fill specific roles. Nationally, Statistics Canada has revised Canada's business sector labour productivity, showing a 0.7% growth for 2024. Despite this improvement, Carolyn Rogers, Senior Deputy Governor of the Bank of Canada, previously underscored the "emergency" level need to boost Canada's overall productivity performance.
Housing Affordability Under Scrutiny
Housing affordability remains a critical concern, with development charges adding considerable costs. A Canada Mortgage and Housing Corporation report indicates these charges represent between 8.2% and 15.7% of the average new condo price in major Canadian cities. The City of Calgary is actively reviewing its Off-site Levies Bylaw, as Mayor Jeromy Farkas has warned that eliminating these fees could strip $240 million from City revenues. This policy dilemma is further complicated by the pausing of $129 million in federal Housing Accelerator Fund money for Calgary by Canada Mortgage and Housing Corporation, pending clarity on the citywide rezoning bylaw review. While Calgary led Canadian municipalities in housing starts in early 2025, non-market housing permits lag significantly behind targets, impacting the "Home is Here" Housing Strategy. Nonetheless, PwC Canada anticipates Calgary will be Canada's top real estate market in 2026, driven by strong economic fundamentals. Meanwhile, Canada's energy sector sees progress, with LNG Canada’s Kitimat site initiating exports and its second processing unit now operational, a development supported by 60% of Canadians, according to an Angus Reid Institute survey.
