This quarterly economic forecast presents the medium-term outlook for the Canadian economy. This release focuses on energy. For an overview of all major components of the economy, go to the Canadian Outlook main page.

• World oil prices recovered last November, but future price increases will be modest due, in part, to OPEC’s growing disillusion with production cuts that it believes have helped U.S. shale producers.
• The price of West Texas Intermediate oil won’t recover to pre-pandemic levels until sometime in 2023.
• Production has started to recover in Western Canada but will be restrained by weak prices and ongoing challenges involved in moving oil to refineries along the Gulf Coast.
• The number of active rigs has rebounded from record lows in April 2020 but remains well below pre-COVID-19 level.
• The LNG Canada project is the only major oil or gas facility under construction.
• The Keystone XL pipeline project, which offered the potential to narrow the price differential between Western Canadian Select and West Texas Intermediate, appears to be dead in the water now that President Biden has revoked its permits.

Key findings

Energy snapshot

Overview

Prices recover in line with bounce-back in global economy

Sluggish recovery expected

Ongoing uncertainty to limit production growth

Methodology