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Summary: Alberta is proposing a southern route for a new oil pipeline from Alberta to Canada’s West Coast, aimed at expanding crude export capacity to Asian markets and reducing reliance on U.S. export routes [1].

The route reportedly starts near Bruderheim, Alberta, and would run toward the southwest coast of British Columbia [5]. Alberta is expected to submit the initial proposal to Ottawa’s Major Projects Office [2].

The project is still preliminary. It has no confirmed private-sector backing yet, according to reporting that cites Prime Minister Mark Carney’s comments [1][6].

CBC reports the estimated cost could be C$35 billion or more, with possible completion between 2032 and 2034 [4].

Key risks: regulatory approval, Indigenous consultation, B.C. political opposition, financing, construction cost inflation, and uncertain long-term oil demand.

Details:

The Alberta government has proposed a southern route for a new oil pipeline to the West Coast, which will be planned and built by the federally owned Trans Mountain Corp., working with Pembina Pipeline Corp. PPL-T +1.66%increase

Prime Minister Mark Carney and Alberta Premier Danielle Smith announced the plan Thursday evening in Calgary. It represented a stark turnaround for the Premier, who had insisted that a conduit to the Pacific should be routed to B.C.’s northern coast.

However, several First Nations in the area had voiced strong opposition to a pipeline in the region. A northern route would have also required changes to thefederal tanker ban along that part of B.C.’s coast, which is considered a non-starter by that province’s government.

That opposition, as well as numerous environmental challenges, prompted Mr. Carney’s Liberal government to persuade Alberta to change tack and consider building a pipeline that largely follows the right-of-way for the Trans Mountain Pipeline from Edmonton to southern B.C.

“We’ve agreed that the best route for a new pipeline is one that already exists: South through the Trans Mountain corridor to our Pacific coast, the gateway to the world’s fastest growing markets,” Mr. Carney said Thursday.

The project is a major component of a push by the federal government to increase exports around the world in the face of a trade war with the United States and make peace with Alberta over resource development.

In a statement, Pembina characterized its involvement as a non-binding agreement with the provincial and federal governments, Trans Mountain and the Alberta Petroleum and Marketing Commission.

The company said its economic interest through construction would be 10 per cent, with the opportunity for up to an additional 10 per cent once the project enters commercial operation. It said Trans Mountain would serve as the lead proponent on the pipeline, responsible for construction, regulatory processes, stakeholder and Indigenous engagement and operation of the asset.

The announcement between Ottawa and Alberta came hours after B.C. struck a deal on a multibillion-dollar federal commitment for infrastructure projects in the province and no change to the federal tanker ban off B.C.’s North Coast.

Premier David Eby said Thursday that the agreement doesn’t obligate B.C. to support an Alberta pipeline proposal. But he said he also knows his province doesn’t have the constitutional ability to stop a pipeline and won’t fight it.

“That’s why this agreement matters,” Mr. Eby said during an event with Mr. Carney in Vancouver. “It ensures that the northern tanker ban stays in place, and it ensures that if a pipeline goes ahead, that British Columbians are fairly compensated for the environmental risks we would take on any new pipeline project.”

The Prime Minister said that Canada and Alberta would be “equal partners” in the pipeline project, and there would be “a meaningful ownership stake for Indigenous communities.”

Alberta and Ottawa have also agreed to overhaul carbon markets, to make “substantial methane reductions” and to new measures to allow power markets to grow “sustainably and affordably,” he said.

Ms. Smith said that after studying northern and southern route options, her government determined that a pipeline from the Alberta town of Bruderheim to a deep-water port terminal on B.C.’s southwest coast offered “the fastest, most cost-effective path to expanding Canada’s energy exports.”

Mr. Carney said the federal government will now refer the West Coast pipeline project proposal to its Major Projects Office, with consultations to begin immediately with Indigenous communities, provinces and territories. He said the government expects the decision on whether it will be a project of national interest will be made by Oct. 1.

Ottawa had said that the industry must build a massive oil sands carbon-capture project, called Pathways, if the pipeline application was to be fast-tracked by the Major Projects Office.

Oil sands developers had been increasingly concerned about the costs of Pathways, saying it would require major public subsidies. However, Mr. Carney and Ms. Smith said the governments had agreed on the terms to launch the project.

“Critically, we’ve agreed the time for action is now,” Mr. Carney said.

Prosperity’s Path: If Alberta’s new pipeline has no private backer, it’s Ottawa’s fault. Ottawa must fix it

Ms. Smith said that discussions with oil sands companies about the Pathways project would continue, particularly around how the sector can expand its production.

An Alberta-Ottawa memorandum of understanding that laid the groundwork for the pipeline plan, signed in November, said Ottawa may consider adjusting a prohibition on tankers loading and unloading oil along the northern B.C. coast.

The northern pipeline route favoured by Alberta would have required overturning the ban.

The long-awaited pipeline announcement came after a flurry of scheduling changes.

The Alberta government had scheduled a news conference about the pipeline proposal for Thursday morning, but late Wednesday it announced without explanation that the event was postponed. In the end, the Prime Minister’s Office and province announced a press conference late Thursday.

Alberta had set itself a deadline of July 1 to file its application for the new pipeline – a date that was included in the MOU that Mr. Carney signed with Ms. Smith on Nov. 27.

The province had initially proposed a series of options for a pipeline route to the North Coast, as well as various ideas for the location of a marine terminal. Ms. Smith had said she preferred such an export point because it afforded shorter sailing time to Asian markets versus the Vancouver area, and it was deep enough to enable access for the large tankers that are favoured for carrying crude long distances.

The Alberta-Ottawa MOU stipulated that any new pipeline would be constructed and financed by the private sector.

Mr. Carney said that Trans Mountain would “plan and construct the pipeline,” working closely with Pembina “who will bring its private-sector expertise and discipline to the construction and operation of the pipeline.”

However, Trans Mountain is a federal Crown corporation, and Ms. Smith said the share of the private-sector stake remains to be seen.

In October, Alberta tapped three energy infrastructure companies – Enbridge Inc., South Bow Corp. and Trans Mountain Corp. – to provide technical and regulatory expertise on its proposal.

Asked during a May interview whether Trans Mountain would consider becoming the project’s proponent, CEO Mark Maki said the federal government has “expressed a strong desire to have a private proponent move the project forward, but they know very well that we’re here and what we’re capable of doing.”

With a report from Tim Kiladze

Oil prices were steady on Friday and little changed for the week as traders held on to hopes for a successful outcome from attempts ⁠to ​secure peace between the United States and Iran.

Brent futures were down 8 cents, or 0.11 per cent, at US$71.72 a barrel by 9:09 a.m. ET. West Texas Intermediate was down 22 cents, or 0.32 per cent, at US$68.47 a barrel.

Over the week, Brent and WTI have lost about ​0.3 per cent.

U.S. markets will be closed on Friday ahead ‌of the U.S. Independence Day holiday on Saturday.

On Thursday, the two oil benchmarks hit their lowest levels since before the U.S.-Israeli war on Iran began in late February.

Oil prices were under pressure as investor hopes of a full reopening of the Strait of Hormuz were buoyed by peace ‌talks between the ​U.S. and Iran, Commerzbank analysts ‌said.

“The U.S.-Iran dealmaking process remains fragile but continues for now, as the question ​of Strait of Hormuz tolls and administration remains contentious,” Citi ⁠analysts wrote on Friday.

“We expect the MoU (memorandum of understanding) to hold, not because ⁠trust has suddenly emerged, but because the incentives to break are poor for both sides.”

Some shipping ​has resumed through the Strait of Hormuz, as called for under the initial U.S.-Iranian deal, but uncertainty is high after the two countries exchanged strikes last weekend following an Iranian attack on a cargo ship.

With the prospect of being able to ship more oil, Gulf producers are working to increase ⁠output.

Kuwait’s oil production rose sharply to 1.65 million barrels per day in June, from 580,000 bpd in May, a source close to the matter told Reuters on Thursday.

At least five supertankers carrying a total of 10 million barrels of Saudi oil have left the Strait of Hormuz and Saudi Aramco has switched to spot pricing from ⁠longer-term contracts to speed sales in Asia, according to ​trade sources and shipping data.

“A sustained recovery in crude prices is more likely to materialize once ⁠the oil currently stranded on tankers and held in storage has been absorbed by the market, and if the ‌recovery in production proves insufficient to offset volumes transiting the Strait of Hormuz,” PVM analyst Tamas ​Varga said.

As the availability of supplies grows, the market structure has turned from backwardation to contango, reflecting decreasing expectation of future shortages.

The spread between front-month Brent and the six-month forward turned negative on July 1 for the first time this ​year.

Canada’s main stock index higher on Friday, ​supported by firmer gold prices after ‌a weaker-than-expected U.S. jobs data tempered bets for a near-term Federal Reserve interest rate hike.

At 9:47 a.m. ET, the S&P/TSX composited ⁠index was up 291.01 points, or 0.83 per cent, at 35,257.68.

Global stocks also extended gains on Friday after a lukewarm U.S. ​jobs report softened expectations for an imminent rate hike ‌from the Federal Reserve and regional activity gauges pointed to an economic expansion during June.

Europe’s broadest index hit a record high and was set for its biggest weekly gain in over a month.

The pan-European STOXX 600 reached 651.77 ⁠before settling ​to a steadied 650.29. Germany’s DAX index rose 0.4 per cent, the French index steadied and the UK dipped 0.2 per cent.

MSCI’s broadest index of world shares rose 0.4 per cent.

“Europe’s Stoxx 600 ended the week with a bang as investors lapped up utilities, industrials and basic materials stocks,” Dan Coatsworth, at investment platform AJ Bell, ​said in a note.

“While these movements imply a more upbeat investor, ‌it’s important to keep watching the U.S. tech stocks, as many are coming off the boil,” he added.

South Korea’s Kospi swung between gains and losses before closing around 6 per cent higher, as buyers pounced on battered chipmaker stocks.

Purchasing Managers’ Index (PMI) data released on Friday indicated increased activity across Asia.

Japan’s services sector returned to expansion in June after stalling ‌the previous month. ​China’s services activity expanded at a ‌slightly slower pace, but overseas demand rose at the fastest rate in 20 months.

“The PMIs remain ​healthy by recent standards and still imply stronger economic momentum across ⁠Q2 as a whole,” analysts from Capital Economics said of the Chinese data.

U.S. job growth slowed sharply in June and payroll gains for the prior two months were revised lower, according to ​data released on Thursday, pointing to a cooling labour market.

The tepid jobs data doused traders’ expectations of an imminent rate hike and raised the chances that the Fed will keep rates on hold until October.

Fed funds futures are pricing an implied 46.8 per cent probability that the U.S. central bank will keep rates steady at its meeting on September 15 to 16, ⁠compared to a 35.8 per cent chance a day earlier, according to the CME Group’s FedWatch tool.

Inflation remained a concern.

“Our biggest anticipated risk this year, even before the Iran war, was shipping,” said James Rossiter, head of global economics at TD Securities.

“Ships have been rerouted all over the world because of the Hormuz Strait closure, leading to less shipping capacity globally,” he told Reuters in a phone call, suggesting the ⁠price effects of this were still working their way through the ​global economy.

U.S. futures remained buoyant, with S&P 500 and Nasdaq futures up 0.3 per cent and 1.1 per cent respectively. The U.S. ⁠market is closed on Friday to celebrate Independence Day.

Against the yen, the U.S. dollar held steady around 161, with the greenback having given ‌up earlier gains as market liquidity was thinned by the holiday and traders remained on watch for intervention.

The Japanese ​currency has been choppy this week after Reuters reported on Thursday authorities may have adopted a new approach to their forays into the market.

The U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, was down 0.2 per cent at 100.76.

In commodities, Brent crude futures ​steadied at US$71.75. Gold was up just over 1.3 per cent at US$4,178.

In cryptocurrencies, bitcoin ticked up 0.1 per cent to US$62,090.78.

Reuters

Oil prices fell more than 1 per cent to a four-month low on Thursday as concerns over supply disruptions eased after mediator Qatar said Iran and the U.S. made progress in talks over ending ⁠the four-month ​war that shut the key shipping through the Strait of Hormuz.

Brent futures were US$1.03, or 1.44 per cent, lower, at US$70.54 a barrel at 11:54 a.m. EDT. U.S. West Texas Intermediate crude fell 92 cents, or 1.34 per cent, to US$67.66 a barrel.

During the session, both benchmarks hit their lowest levels since before the U.S.-Israeli war on Iran began ​in late February. The talks made “positive progress” on matters related to the memorandum ‌that halted the war in June, a Qatar Foreign Ministry spokesperson said in a post on X. There was no sign yet that the sides made headway towards a lasting peace.

The next meeting between Iran and U.S. negotiators will take place after July 9 funeral processions for Iran’s late Supreme Leader Ayatollah Ali Khamenei, the Qatar ministry added.

“Oil has been flowing ‌out of ​the Strait of Hormuz, while ‌at the same time we’re also pouring oil out of strategic reserves. And on top of that, crude oil ​buying from China and oil demand has not really properly revived ⁠yet,” said Bjarne Schieldrop, chief commodities analyst at SEB.

“This could be sort of a dynamical ⁠picture of price moving down sharply and then rebounding at some point.”

At least five supertankers carrying a total of 10 million barrels ​of Saudi oil loaded from Ras Tanura have exited the Strait of Hormuz, with Saudi Aramco switching to spot pricing to speed up sales in Asia, according to trade sources and shipping data.

“It seems the refineries can get as much oil as they need, but squeezing it out of the refineries is harder,” said Phil Flynn, senior analyst with the Price Futures Group. “The market ⁠thinks the Iran situation is getting better but there are going to be ups and downs, but it’s getting better.”

U.S. crude stocks fell to their lowest last week since 2018 as domestic refinery demand rose, while gasoline inventories also declined, the Energy Information Administration said on Wednesday.

UBS cut its Brent forecasts, citing the increase in oil shipping through the Strait of Hormuz, through which 20 per cent of the world’s oil is carried by tanker ⁠ships. The bank lowered its Brent crude price forecasts. It cut its third-quarter ​estimate by US$25 per barrel to US$80 and reduced its fourth-quarter forecast by US$10 per barrel to US$80. It trimmed its 2027 outlook ⁠by US$10 per barrel to US$75.

Analysts at HSBC expect the market “to absorb returning Middle East barrels through gradual restocking, alongside the end of IEA strategic stock releases ‌in July.”

“As the near-term ‘mini-glut’ fades, Brent could move back towards US$80/b or higher,” the HSBC note said.

Meanwhile, Nigeria has become ​the first OPEC member to join the International Energy Agency as an associate member, a step that deepens ties between the global energy watchdog and Africa’s largest oil producer. Elsewhere, Ukrainian forces struck the Lukoil-Nizhegorodnefteorgsintez oil refinery in Russia’s Nizhny Novgorod region, Ukraine’s General Staff said on Thursday.

• Nonfarm payrolls for June increased by 57,000 in June, slower than the downwardly revised 129,000 added in May and worse than the 115,000 Dow Jones consensus forecast.
• The unemployment rate, however, dropped to 4.2%, largely due to a slump in the labor force participation rate, which fell 0.3 percentage point to 61.5%, the lowest since March 2021.
• Household employment plummeted during the month, with 507,000 fewer people reported at work.
• Professional and business services contributed the most, with a gain of 36,000. Social assistance added 25,000 and healthcare employment rose by 22,000.

https://www.cnbc.com/2026/07/02/jobs-report-june-2026-.html

Canada’s main stock index edged higher on Thursday, lifted by the materials sector as gold prices jumped after a disappointing U.S. jobs ⁠report ​tempered expectations for interest rate hikes.

The Toronto Stock Exchange’s S&P/TSX Composite Index was up 65.65 points, or 0.19 per cent, at 34,922.64 at 10:48 a.m. ET, following a market holiday on Wednesday.

TSX Composite Index

U.S. job growth slowed ​more than expected in June and payroll ‌gains for the prior two months were revised lower, pointing to a cooling labor market and prompting financial markets to scaleback expectations for a near-term interest rate hike from the Federal Reserve.

Traders priced in a ‌much ​slimmer chance of a ‌rate hike from the Fed this month, but continued to ​see monetary policy tightening in September as likely.

“It ⁠is showing some signs of weakness in the ⁠U.S. labor market, but nothing too alarming right now,” said Michael Dehal, senior ​portfolio manager at Dehal Investment Partners at Raymond James.

“I think the focus is still on price stability and the Fed,” Dehal said.

Spot gold and silver were up 2.3 per cent and 3.7 per cent, respectively, as the dollar came under pressure ⁠after the jobs report. The S&P/TSX Global Gold index rose 2.5 per cent and the materials index added 1.7 per cent.

Iran and the United States concluded a round of indirect talks in Doha on Wednesday without any clear breakthrough toward a lasting peace agreement. Oil ⁠prices still slid as supply concerns around ​the Strait of Hormuz eased.

Meanwhile, the U.S. denied an extension of the U.S.-Mexico-Canada Agreement for 16 ‌years without changes. The decision keeps the agreement in place for another ​10 years with annual reviews before it expires, unless the three countries agree to renew it with changes.

“That was largely expected. But going forward, investors will be looking at any ​signs of renegotiations,” said Dehal.

U.S. stocks are rising Thursday after the latest update on the job market suggested the Federal Reserve may feel less pressure to hike interest rates .

The S&P 500 climbed 0.7 per cent and is on track to close out its best week in two months ahead of Friday’s holiday for Wall Street. The Dow Jones Industrial Average was up 454 points, or 0.9 per cent,and the Nasdaq composite was 0.7 per cent higher.

Stocks got some help from easing Treasury yields in the bond market , which fell after a report from the U.S. government said employers added 57,000 jobs to their payrolls last month. That’s growth, which is good for the economy, but it was also short of the 100,000 jobs that economists expected and a slowdown from May’s hiring pace.

The weaker-than-expected result could keep pressure off inflation , which has been accelerating worldwide because of jumps in oil prices caused by the war with Iran . And if inflation slows in upcoming months, now that oil prices are back below where they were before the war, the Federal Reserve may feel less need to raise interest rates several times this year.

That would be a relief for investors, who tend to love lower interest rates because they can give the economy a boost by making it cheaper for U.S. households and businesses to borrow money and spend. Lower rates also tend to push upward on prices for stocks and other investments.

The yield on the 10-year Treasury got to 4.50 per cent in the morning, up from 3.97 per cent just before the war. But after the release of the U.S. hiring data, it immediately fell back to 4.47 per cent.

The two-year Treasury yield, which more closely tracks expectations for the Fed, fell more sharply. Traders now see an 80 per cent chance that the Fed and its new chairman, Kevin Warsh, will not raise the federal funds rate at its next meeting later this month. That’s up from the 71 per cent chance seen a day earlier, according to data from CME Group.

“The labor market isn’t overheating,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. He said the data could allow the Fed to wait through the summer to get more clues about how inflation is behaving before having to decide on hiking rates.

Also helping Wall Street was a steadying for some stocks of computer chip companies. They’ve been under pressure on worries that their stock prices shot too high in the frenzy around artificial- intelligence technology and that all the spending on chips and data centers may not result in as much profit and productivity growth as hoped.

Memory maker Micron Technology’s stock rose 1.4 per cent and recovered some of its 10.6 per cent drop from the day before. But Applied Materials fell 2.8 per cent, while Advanced Micro Devices swung between gains and losses.

Elsewhere on Wall Street, the company behind LaCroix sparkling waters climbed 10 per cent after National Beverage said it will pay a special dividend of US$3.25 for each share that investors hold.

It was a widespread rally for U.S. stocks, with three out of every four stocks rising within the S&P 500. Some of the biggest gains were for companies in the cryptocurrency industry, as the price for bitcoin climbed 4 per cent toward US$62,000. A day earlier, it dropped near its lowest level since 2024.

Robinhood Markets rose 10.4 per cent, Coinbase Global gained 8.5 per cent and Strategy rallied 11.4 per cent.

In the oil market, prices continued to sink on hopes for negotiations for a permanent end to the war with Iran. Brent crude, the international standard, fell 1 per cent to US$70.82 per barrel.

In stock markets abroad, indexes fell sharply in several Asian markets. South Korea’s Kospi index dropped 7.9 per cent due to big losses for chip companies like SK Hynix. That’s its worst drop since a 10 per cent plunge a little more than a week ago.

Indexes also fell 2.5 per cent in Tokyo and 2 per cent in Shanghai.

European indexes were stronger, and France’s CAC 40 rallied 1.9 per cent.

Reuters and The Associated Press

​Oil prices were heading on Tuesday for their biggest quarterly loss since ​the COVID-19 pandemic in early 2020, with investors ‌eyeing potential U.S.-Iran talks in Doha amid a strained interim ceasefire in the four-month-old war.

Brent August crude futures, which expire on Tuesday, were up 0.21 per cent, or 15 US cents, at US$73.30 a barrel ⁠at 9:02 a.m ET. However, the contract was on track for a third straight monthly decline, down about 20 per cent so far in June.

The more actively traded September contract gained 0.61 per cent, or 45 us cents, to US$74.36 a barrel.

U.S. West Texas Intermediate for August rose 0.51 per cent, or ​36 us cents, to US$71.11 a barrel. However, the contract was ‌down for the second straight month, by about 19 per cent, so far in June.

Brent was down about 38 per cent for the quarter, while U.S. West Texas Intermediate crude had fallen about 30 per cent. Both Brent and WTI prices are close to where they were trading just before the start of ‌the U.S.-Israel war ​on Iran.

“I wouldn’t say ‌the market has priced out a risk premium, but previously stranded ships have become ​available with the increase in ships moving out of ⁠the Gulf, creating a temporary wave of new supply,” UBS analyst Giovanni ⁠Staunovo said.

Morgan Stanley said it now models an implied global oil market surplus of 4.8 million barrels ​per day in 2027.

Top U.S. envoys who have arrived in Doha will not hold a high-level meeting with Iran, a Qatari official said on Tuesday, casting doubt on the progress of efforts to bring a lasting halt to the Iran war and fully reopen the Strait of Hormuz.

Instead, there will ⁠be technical talks this week on issues including regional security that could later be elevated to senior level, Qatar’s Foreign Ministry spokesperson Majed Al Ansari told a media briefing.

The uncertainty over whether the two sides would meet highlighted the fragility of a June 17 agreement to pause fighting that has disrupted global oil flows through the ⁠Strait of Hormuz and posed a political challenge for ​U.S. President Donald Trump ahead of November’s congressional elections.

Analysts have cut their 2026 oil price ⁠forecasts for the first time since the Iran war began, after five straight monthly increases, as the reopening of the ‌strait eased concerns over prolonged supply disruptions, a Reuters poll showed on Tuesday.

Meanwhile, Iraq’s SOMO ​has offered wide discounts to its official selling prices to encourage term buyers to lift Basrah crude from its terminal inside the Middle East Gulf in July, according to trade sources and a document reviewed by Reuters

The Canadian economy was back in growth mode to start the second quarter, rebounding from a mild contraction in the first three months of 2026.

Statistics Canada said Tuesday that real gross domestic product rose 0.5 per cent in April, the fastest growth rate for the economy since July, 2025. The result topped Statscan’s early estimate for 0.4-per-cent growth in the month.

https://charts.theglobeandmail.com/9ROoY/8

Oil and gas extraction surged in April helped by higher synthetic crude oil production, which rebounded after unscheduled maintenance tempered growth to start the year, the agency said.

But growth was also widespread across industries in April. The manufacturing, construction and transportation and warehousing industries all posted gains, as did the public sector. A 0.7-per-cent gain in the construction industry was the sector’s first increase in five months.

Statscan said real estate agents’ and brokers’ offices were busier in April, marking the subsector’s first growth since August 2025 on the back of stronger home sales in the Greater Toronto Area.

The agency’s early estimates have growth moderating but continuing with an increase of 0.1 per cent in May thanks to growth in finance, insurance, real estate and leasing.

An economic contraction in March dragged real GDP by expenditure into barely negative territory for the first quarter of the year. That sparked rumblings of a recession after two consecutive quarterly contractions, though most economists argued that label was premature.

Multiple economists weighing in Tuesday morning said the April data reinforced that Canada is not in a recession.

BMO chief economist Doug Porter said calls of a recession based on the previous two quarters were a “false alarm.” The broad-based nature of the rebound is also encouraging, but Porter did not declare that a recovery was in full swing.

April’s rebound “is clearly a correction from the prolonged winter lull and is unlikely to persist,” he said in a note to clients. The more modest May gains are also a reminder the economy is still growing below potential.

“April’s GDP rebound shows the economy is still chugging along, even if growth remains sluggish and not especially strong,” said Andrew DiCapua, principal economist for the Canadian Chamber of Commerce, in a media statement.

A separate release from Statscan on Tuesday detailing energy statistics in the economy showed exports of refined petroleum surged 69.7 per cent year-over-year as the war in Iran pushed prices higher globally.

Production of crude oil and equivalents rose 4.2 per cent in April, which Statscan said was the 11th consecutive month of year-over-year increases.

Oilsands extraction contributed the most to the stronger activity in April, though offshore production from Newfoundland and Labrador also hit its highest levels since March, 2020.

Crude oil exports to the United States by pipeline rose 8.8 per cent annually in April, while exports to Asia and Europe jumped 46.6 per cent. The agency pointed to the closure of the Strait of Hormuz and the ongoing conflict in the Middle East as hampering crude oil supply from the region.

The April and early May GDP estimate put the second quarter of the year on track for growth topping 2 per cent annualized, Porter said, which would overshoot the Bank of Canada’s expectation for 1.5-per-cent growth in the quarter.

https://charts.theglobeandmail.com/yMCN3/6

The central bank is set for its next interest rate decision on July 15.

Thomas Ryan, North America economist with Capital Economics, said in a note the second quarter of the year will also get a lift from activity related to the FIFA World Cup.

Despite signs of second-quarter momentum, Ryan said the first-quarter miss means growth over the first half of 2026 could still fall short of the Bank of Canada’s expectations.

“While this should put a firm end to any debate about whether the economy is in recession, growth over the first half of the year is still set to average considerably below the Bank of Canada’s forecast, supporting our view that rate hikes are a long way off,” he said.

The biggest source of uncertainty for personal finances in Canada is a certain warmongering U.S. president.

Next comes the state of federal government finances. Under Prime Minister Mark Carney, we have a stated objective of building the economy through strategic investments and substantially increasing defence spending. We also have a persistent yearly gap between government spending and revenues, a.k.a. the deficit.

While the government has made some spending cuts, it’s unclear right now how it will afford its spending agenda without increasing the deficit to worrying levels. Some of the more obvious options include higher taxes, cuts to Old Age Security and spending reductions that download costs to provinces, municipalities and individuals.

Last fall, Mr. Carney told Canadians it would take some sacrifices to address the challenges facing the country. Now, we need details. It’s getting harder to plan for the future without them.

Opinion: What will you sacrifice for Carney and country?

Let’s acknowledge the difficulty of laying out a grand plan for government finances right now. U.S. President Donald Trump’s Iran war pushed upenergy prices from year-ago levels, and inflation has kicked higher as a result. Mr. Trump’s trade war is being fought in negotiations over the U.S.–Mexico-Canada Agreement, and it weighs heavy on the economy.

The next federal budget isn’t expected until next fall, though. There’s enough time until then to combine economic policy with at least an outline of changes to taxation and spending on programs like OAS.

Here’s a quick summary of what the government is up against. The federal deficit was $55.3-billion for the period from April, 2025, to March, 2026, compared with $43.2-billion over the same time a year earlier. Meantime, the government has committed to increasing defence spending to 3.5 per cent of economic output in the years ahead from the current 2-per-cent level.

Blowing out the deficit to afford a defence build-up could alarm foreign investors, who would require higher interest rates to continue buying federal government bonds. These interest rate hikes would increase the financial burden on federal finances, and they could trickle down to your household in the form of higher borrowing costs for mortgages and lines of credit.

To balance its budget, or at least contain the deficit, the government likely needs to use a combination of spending cuts and revenue increases. Further to the sacrifice theme, raising the GST a percentage point or two from the current 5-per-cent level is an option. Obviously, such a move requires a more generous sales tax rebate for lower-income people.

A higher GST might discourage consumption at some level, but the affluent have shown a willingness to spend in uncertain times. This is today’s K-shaped economy in action – the financially comfortable, who are seeing their circumstances improve, are the upper arm of the K, while financially struggling households are the lower arm.

Preparing for a higher GST by spending now on high-cost items seems pointless – who knows if the government has the guts to try this obvious revenue source? But it’s not too soon to consider the result of effort to pare the massive cost of OAS.

Modernizing Old Age Security would free billions for Ottawa to address affordability

An increase in the start age for OAS to 67 from 65 was announced and cancelled by previous governments. What hasn’t been tried is a more aggressive clawback of OAS benefits for high-income seniors.

Perhaps the clawback could be calibrated to household income rather than individual. Or, the clawback could be introduced at lower levels than the $93,454 for payments made between July of this year through next June. It seems a no-brainer to lower the income level where OAS is fully clawed back – it sits at $152,062 for retirees aged 65 to 74, and $157,923 for those 75 and up.

Reforming OAS should be done as soon as possible, if that’s a direction the government wants to go. Baby boomers continue to retire in large numbers, and they need hard info on OAS benefits to properly plan their future income flow.

Tax-wise, the last Liberal government tried to increase taxes owing on capital gains above $250,000, but couldn’t find a way to fight the “persecution of the rich” narrative that resulted. The Carney government cancelled this tax hike, but it has to be considering other ways for the wealthiest to contribute more to government tax revenue.

Regardless of where the government comes down on taxes, it would be nice to get a definitive word about future plans.

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Rob Carrick is a personal finance expert and former Globe and Mail staff columnist.