Canada’s economy beat expectations in the latest GDP reading , and Alberta was likely a major driver of that growth.

Statistics Canada doesn’t provide monthly provincial GDP numbers, but Charles St-Arnaud, an economist at Edmonton-based Servus Credit Union, said the province probably led the way as Canada’s gross domestic product expanded 0.5 per cent in April from the month before, beating economists’ forecasts.

“For Alberta, the details available in the report suggest that economic activity was stronger than in the rest of the country in May, thanks to the strong rebound in oil and gas extraction,” St-Arnaud said.

The 3.7 per cent rebound in oil and gas extraction recorded in the month came mostly from unconventional sources, with almost 100 per cent of that located in Alberta, he said.

“Clearly this suggests that on the month, Alberta was way better than the rest of the country, but it’s also a payback from the weakness we had in the month of March,” St-Arnaud said.

Nationally, population shrunk slightly, but it’s still growing in Alberta, which is also working in the province’s favour.

“ Population growth is kind of your baseline growth,” he said.

Alberta has often been a national leader in growth. In 2025, the province’s economy grew 2.6 per cent, beating national growth of 1.6 per cent, according to his data.

There is a looming fly in the ointment for the province — the upcoming vote on whether Alberta should hold a binding referendum on separation and the unease that is fuelling among the business community.

For example, seven in 10 businesses surveyed by the Alberta Chambers of Commerce said uncertainty around the October vote was “impacting the provincial economy, up significantly since January.”

More concretely, 85 per cent reported other fallout including delayed or cancelled projects, while 71 per cent cited relocation or expansion of businesses outside Alberta and six in 10 said they had difficulty attracting and retaining talent.

“These are not abstract concerns,” Shauna Feth, chief executive of the Alberta Chambers of Commerce, wrote in a piece published in the Edmonton Journal on June 26. “The number of businesses expressing a positive outlook about the future of the province has declined nearly 10 points since January. That optimism matters. It is the foundation on which businesses invest, expand, and hire.”

Nonetheless, Canada’s GDP rebound in April should quiet recession talk, but details behind the headline numbers suggest that interest rate cuts, not hikes, are the more likely surprise ahead, said Douglas Porter, chief economist at Bank of Montreal.

“The reality is that output is still up only a little more than one per cent from a year ago, which is below potential and still more consistent with monetary policy biased to ease rather than to tighten,” said Porter said Tuesday after the data was released.

At the start of the Iran war, markets priced in as many as three hikes by the Bank of Canada this year on concerns that high oil prices would hike inflation.

Since the U.S. and Iran brokered an apparent moratorium, those bets have evaporated. As of June 30, there was a slightly more than 60 per cent chance of a rate increase at the Bank of Canada’s final announcement for 2026, according to Bloomberg rate swap data.

BMO’s official call is for the central bank to hold rates at 2.25 per cent until the end of 2027, but Porter’s feeling is if something goes awry with the economy, a cut looks more appropriate.

“If … something happens that we didn’t foresee, we just think it’s more likely that the Bank of Canada will find the need to cut interest rates rather than raise them,” he said.

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Canada’s real gross domestic product grew by 0.5 per cent in April, marking a strong start to the second quarter of 2026 that was slightly higher than economists’ expectations.

Gains were mainly driven by the mining, quarrying, and oil and gas extraction sectors, which grew by 2.9 per cent month-over-month in April, Statistics Canada said Tuesday.

This is the largest growth rate for the sector since February 2024 and “more than offsets” March’s 1.4 per cent contraction, officials said.

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As an employee, you may be able to claim a deduction on your tax return for work expenses that you aren’t reimbursed for by your employer. Typical deductible employment expenses can include: allowable motor vehicle expenses, out-of-town travel expenses, parking (other than at your work), office supplies, office rent and work-from-home expenses. But there are conditions.

Tax expert Jamie Golombek tells us about a recent tax case involving a taxpayer who attempted to claim motor vehicle expenses, as well as work-from-home expenses and what the court thought about that. Find out more here.

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McLister on mortgages

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Today’s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff and Bloomberg.

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