Alberta’s economy and supply chain balances risks and opportunities

Alberta continues to be one of the strongest economic engines in Canada. However, as Rob Roach explained during an update in Calgary in February, tariffs imposed by the United States could lead to a significant slowdown or even a recession.

Speaking at the CITT’s Alberta logistics update, Roach, deputy chief economist and managing director at ATB Financial, compared Alberta’s economy to the board game Snakes and Ladders.

“It struck me how similar it is to the economy—there’s always uncertainty, but right now, there are more potential ‘snakes’ that could slow our trajectory,” he said. “Thankfully, there are also ‘ladders’ that could provide a boost. The challenge is that we don’t always know which we’ll land on.”

One of the “ladders” Roach cited was bringing inflation under control.

“Since January of last year, inflation has averaged 2.4 per cent, a level that supports economic growth without excessive price increases,” he said. “This decline is a positive development—a ‘ladder’ on the board.”

Despite this, the lingering impacts of inflation continue. As Roach pointed out, while prices are no longer increasing, they have not dropped, meaning households must adjust to these economic shifts. He said this hits households particularly hard in Alberta, where younger families tend to have higher debt levels due to higher incomes.

Global risks also pose a threat to Canada and Alberta’s economic stability, including geopolitical conflicts, China’s economic slowdown and, for Alberta, the influence of the Organization of Petroleum Exporting Countries (OPEC) on oil prices.

“OPEC has been restricting oil supply to maintain higher prices,” Roach said. “If they reverse this policy, we could see a drop in oil prices, directly impacting Alberta’s economy.”

The U.S., however, continues to have a significant impact on Canada’s economy and supply chain.

“The U.S. economy has exceeded expectations, continuing to grow despite higher interest rates,” Roach said. “Since the U.S. is Alberta’s biggest trading partner, this is a positive factor. However, looming trade disputes, particularly tariffs, pose a serious threat. If these tariffs are enacted, they would significantly disrupt supply chains and could push Canada—and Alberta—toward a recession. Avoiding these tariffs is critical for maintaining economic stability.”

If Canada manages to avoid the Trump tariffs, Roach said Alberta has three key “ladders” that could position the province for economic resilience this year.

In addition to oil and gas production, Alberta has diversified, investing in emerging industries. The province has also seen ongoing population and employment growth, with a young workforce and a strong labour market.

With its diversification efforts, Alberta has seen growth in several sectors, including tourism, food manufacturing and logistics and transportation.

Oil production is at an all-time high, Roach said, with 2024 being a record year thanks to the Trans Mountain pipeline expansion, which added 590,000 barrels per day of capacity.

“However, while we’re exporting more oil and benefiting from higher production, we’re not seeing the kind of investment in future growth that characterized past booms,” Roach pointed out. “There’s limited room for expansion. Pipeline capacity is expected to max out again within the next few years, discouraging producers from pouring billions into new projects.”

Overall, Alberta’s economic growth outpaced the national average last year, with a 2.5 per cent increase compared to Canada’s 1.2 per cent.

“We are living in the most volatile era in supply chain history”

– Charles Daharry, national manager of transportation carrier management and supply chain for RONA

Agility in modern supply chains

Shippers play a major role in the overall supply chain. As Charles Daharry, national manager of transportation carrier management and supply chain for RONA, underscored, they sit at the centre of the industry’s transformation.

“We are living in the most volatile era in supply chain history,” he said. “We’re not just moving goods from point A to point B and back again. We are responsible for keeping supply chains flowing, ensuring food remains on shelves, clothes on our backs and medicine available when needed.”

In trying to build resiliency and agility, Daharry believes shippers have been defining success the wrong way—thinking too much in terms of cost-cutting, efficiency and transactional relationships.

Instead, he said, shippers need to focus on being more resilient in the face of ongoing disruption, as well as more collaborative with customers and businesses.

“Collaboration is about strengthening partnerships because no one wins in a supply chain built on adversarial relationships,” he said. “Success can no longer be measured solely by cost reduction; it must also be about strengthening partnerships and building adaptable supply chains that support future growth.”

To achieve this goal, Daharry offered three lessons for success. The first is understanding supply chain dynamics.

He said supply chains operate in cycles: when demand is high and capacity is low, carriers hold the power. When demand drops and capacity is high, shippers regain control.

Citing two key moments in recent history, Daharry pointed to the COVID-19 pandemic, when demand surged, followed by the post-pandemic shift, when demand dropped and inflation rose.

“These fluctuations create instability. When companies focus purely on cost, they put their supply chains at risk,” he said. “Shippers that chase the lowest rates without considering service quality and carrier stability often find themselves stranded when disruptions occur. Likewise, carriers that demand excessive premiums when they have leverage risk damaging relationships with shippers.”

The second lesson is rethinking requests for proposals (RFPs).

“RFPs are a necessary but often flawed part of supply chain management. Traditionally, they have been designed to drive down costs and secure capacity,” Daharry said. “However, when used incorrectly, they can introduce inefficiencies and risks.”

Although the RFP process can lead to lower rates, he said, it often sacrifices service quality, flexibility and innovation.

“Instead, RFPs should focus on aligning business needs with the right carriers,” he said. “Strong carrier networks provide more than just capacity; they offer innovation, visibility and the ability to adapt in real time.”

Daharry said shippers should shift from transactional contracts to strategic partnerships, building long-term relationships that bring stability and quality service even during disruptions.

The final lesson Daharry recommended to shippers is moving from resilience to agility.

“Resilience is important, but it’s not enough,” he said. “The real goal is agility—the ability to adapt to disruptions in real time. Agile supply chains don’t just withstand disruptions; they evolve and thrive in any market condition.”

Daharry said the three key factors to enabling agility are data sharing and forecasting, flexible capacity agreements and joint problem-solving.

“A real-world example is the great Canadian rail crisis, where rail service disruptions led to capacity shortages and soaring spot market rates,” he said. “Shippers who proactively worked with their carriers and established contingency plans minimized impact and avoided costly last-minute rate spikes. This wasn’t luck—it was the result of long-term planning and collaboration.”

Daharry said buzzwords and phrases like “shipper of choice,” “carrier of choice,” and “collaboration” should not be seen as mere marketing phrases but rather as real, transparent commitments.

“The future isn’t about playing it safe; it’s about preparing to win,” he said. “The companies that will lead the next era of supply chains aren’t those chasing the lowest rates. They are the ones investing in the right partnerships, recognizing that supply chains are about more than moving freight. They’re about moving forward together.”