Operating context – PrairiesCan 2026–2027 Departmental Plan
Canada and the Prairies have entered a period of transformation as they adapt to the realities of increased global protectionism, heightened geopolitical risk, and slower growth. Tariffs, and a weakened Canada-U.S. trade relationship, have shifted the Prairie economy to a lower growth path, with disruption and uncertainty weighing on exports, business and consumer confidence, investment, and the labour market. In the face of these challenges, Prairie businesses and exporters are exploring new supply chains and market diversity for risk mitigation, growth opportunity, and long-term resilience.
The region is expected to lead the nation in near-term growth, supported by continued population growth and existing natural resource strengths. Economic forecasts for 2026 by Canada’s four largest banks improved slightly in late 2025. Canada’s real GDP is expected to grow by 1.4% in 2026.Endnote 1 Alberta’s economy, boosted by continued migration and steady energy sector production, is expected to grow by 2.3% to lead the provinces in 2026. Saskatchewan, bolstered by strong business investment from the ongoing construction of major mining projects, is projected to grow by 1.9% to rank second. Manitoba, partially insulated by a diversified export base but exposed to tariffs in manufacturing and agriculture, is expected to match the national growth rate at 1.4%.
Opportunities
Despite the challenges posed by a shifting global economy, the Prairies are primed to build, innovate, and seize opportunities to lead Canadian economic resilience and prosperity. Opportunities extend beyond the Prairies’ traditional strengths in natural resources and agriculture, which continue to provide a strong economic foundation. As new trade agreements and partnerships develop, the expansion of Prairie agri-food exports into new global markets will help capture more value from agricultural production while diversifying local economies. The region also boasts significant capabilities in advanced manufacturing and technology, with key strengths in aerospace and defense, critical minerals and advanced materials, and artificial intelligence that will bolster Canada’s defense industrial base. With large-scale hydroelectric capacity in Manitoba, immense wind and solar electricity potential in Alberta, and emerging nuclear energy prospects in Saskatchewan, the Prairies are also poised to expand clean electricity generation and strengthen Canadian energy security.
Challenges
Tariffs and the continued uncertainty around global trade policy have resulted in a slowing Prairies economy that faces significant headwinds. Bolstering domestic supply chains and establishing new trade partnerships will take time. There are also longstanding impediments to growth. Transportation bottlenecks continue to hinder the movement of Prairies goods to diverse markets, and broadband access for rural communities across the Prairies remains an impediment to participation in the digital economy. As an interconnected industrial system, the expansion of clean electricity, broadband infrastructure, and transportation networks are critical to future growth and export diversification opportunities on the Prairies. Investments in growth-enabling infrastructure, including innovative housing solutions, are key to supporting growth opportunities and unlocking the long-term economic potential of the Prairies.
PrairiesCan supports businesses and communities
Small and medium-sized enterprises (SMEs) are central to our economy, accounting for 99.8% of businesses and 88% of employment. SMEs are our key clients and partners through which the department promotes economic growth and development in communities across the Prairies. PrairiesCan supports SMEs in the region to grow and seize new opportunities in areas such as defence. The department also helps SMEs navigate challenges, including tariffs, through programs designed to boost productivity and competitiveness, expand and diversify markets, enhance innovation, promote technology adoption, and foster inclusive growth.