Yesterday, we discussed new capital spending intentions survey data that point to a solid increase in capital investment in Alberta in 2025.

There are tariffs risks that may throw off the headline increase (the survey was conducted before President Trump’s Executive Order of February 1 announcing blanket tariffs on Canadian goods), but the long-term themes are worth a deeper dive.

One overarching theme is that investment in the province is moving downstream—that is, more spending on adding value to raw natural resources.

Let’s start with oil and gas.

Investment in the extraction or upstream side of the business has moved higher as of late as producers take advantage of new market access gained through the Trans Mountain Expansion and, later this year, LNG Canada phase 1. Investment intentions for oil and gas extraction in 2025 are $33.9 billion, the highest level since 2015.  But it's a far cry from the high watermark of $58.1 billion set in 2014. Producers are optimizing existing assets and focusing on returns to investors as opposed to committing to large greenfield projects like in past oil and gas booms.

Now let’s look downstream. By this, think about how crude oil and natural gas are transformed into value-added products like gasoline, hydrogen, and petrochemicals.

In this category, investment has taken off. The largest project underway is Dow’s Path2Zero in Fort Saskatchewan—the first net-zero carbon emissions petrochemical facility of its kind. Then there is the Air Products Hydrogen Complex and Imperial Oil’s renewable diesel project.

The main driver in this category is petrochemicals. Alberta investment intentions for chemical product manufacturing in 2025 is $3.4 billion—the highest on record.

A similar downstream trend can be found in the agri-food sector. New food processing projects have been announced or are under construction, like McCain’s potato processing expansion in Coaldale and P&H Milling Group’s flour mill near Springbrook. Food manufacturing investment intentions for 2025 are $663.2 million, the second highest on record after 2024.

Bottom line: Alberta’s economy is still adjusting to lower levels of overall investment over the last decade caused by a pullback in the oil and gas extraction industry. But amid this major shift, downstream activities have taken on increased importance, adding more value to resources and helping diversify Alberta’s investment base.

Answer to the previous trivia question: The Deutsche Bundesbank is the independent central bank of the Federal Republic of Germany. It has formed part of the Eurosystem since 1999, sharing responsibility with the other national central banks and the European Central Bank for the single currency, the euro.

Today’s trivia question: Where does the word plastic come from?