Investor optimism climbs while production, activity, and capital spending expectations rise
Canada’s energy sector is heading into 2026 with renewed momentum, as companies and investors grow increasingly confident in both near-term performance and longer-term opportunities, according to a new industry survey.
Findings from ATB Cormark Capital Markets show sentiment has improved across exploration and production (E&P) firms, energy services providers, and institutional investors, pointing to stronger activity levels and a more favourable investment backdrop compared to late 2025.
“Our spring 2026 survey points to a meaningful improvement in the outlook for the Canadian energy sector compared with fall 2025. The shift in institutional investor views is particularly notable, with a much larger share of respondents becoming more bullish on energy and expecting Canadian energy equities to outperform the broader market over the next 12 months,” said Darren Eurich, CEO, ATB Cormark Capital Markets.
Growth has emerged as the dominant theme for the year ahead. Nearly all surveyed E&P firms—95%—expect output to increase over the next 12 months, while both oil- and gas-focused producers are targeting production gains of about 6%.
At the same time, activity across the services segment is poised to expand. Three-quarters of respondents anticipate higher customer demand in 2026, with overall field activity projected to climb roughly 4% year over year.
Investor sentiment is also strengthening. More than eight in 10 institutional participants reported becoming more optimistic on energy over the past six months, and a similar share expects Canadian energy stocks to outperform broader markets. Additionally, 76% view the sector as undervalued or significantly undervalued.
Tim Monachello, managing director at ATB Cormark Capital Markets, said the industry is benefiting from improving fundamentals and supportive pricing conditions.
“The survey suggests the industry is entering 2026 with stronger underlying momentum. It points to expectations for higher field activity, broad-based production growth and improving energy services pricing and margins, with capital budgets still based on relatively conservative oil price assumptions,” he said.
“In that context, a prolonged period of elevated crude prices could provide meaningful tailwinds for Canadian activity levels, E&P production growth, corporate balance sheets and shareholder returns.”
Higher crude prices are also giving companies more flexibility in how they deploy capital. Many producers indicated excess cash flow will likely be directed toward reducing debt and increasing drilling activity, while also supporting shareholder returns.
Despite the improved outlook, risks remain. Federal energy policy continues to rank as the top concern for the sector for the eighth consecutive survey, although confidence in a more supportive policy direction has edged higher.
Infrastructure constraints are also gaining attention, with pipeline capacity emerging as a growing medium-term challenge. Meanwhile, West Coast LNG development remains the industry’s leading long-term opportunity, even as timelines for key projects have been pushed further out.
Overall, the survey signals a sector increasingly focused on expansion, supported by stronger pricing, rising investor interest, and a shift toward growth-oriented capital strategies.
