Producers plan higher 2027 output while institutional investors rank growth spending first for the first time since 2021
The Canadian energy sector is moving from caution to expansion, according to ATB Cormark Capital Markets’ Fall 2026 Energy Sector Survey.
Executives at producers and service firms expect higher output and field activity in 2027. Meanwhile, institutional investors—for the first time since 2021—put growth capital ahead of share buybacks and debt repayment.
Energy executives signaled strong operational expectations across the board:
- E&P expansion: Nearly all E&P respondents — 96 percent — anticipate higher production next year, up from 88 percent in fall 2025. This builds on momentum from earlier this year, when E&P survey data showed 95 percent of respondents already anticipated higher production. Oil-weighted producers target roughly 10 percent growth, while gas-weighted producers anticipate approximately 5 percent growth.
- Capital spending: Results point to a 5 percent to 10 percent increase in field activity and E&P capital expenditures in 2027.
- Services sector: 90 percent of services respondents expect higher customer activity than in 2026. Seventy-one percent report an improved three-month outlook (with none reporting deterioration), and 57 percent expect margin expansion within six months.
- Capacity utilization: It is the first time since fall 2022 that services firms have reported more excess demand than excess capacity.
ATB Cormark found 61 percent of respondents expect crude to fall over the next year from about USD98 per barrel. Some 53 percent of respondents expect WTI to average above USD75 over three to five years, up from 43 percent in spring 2026.
Natural gas looks firmer near term: 42 percent expect higher prices and 6 percent a decline. Longer-term gas expectations have softened.
Institutional sentiment turns bullish on growth
ATB Cormark reports that 76 percent of institutional investors turned more bullish over the past six months, with 61 percent increasing net exposure. Nearly 80 percent describe Canadian energy equities as undervalued.
This aligns with broader market trends, as six in 10 advisors turned more bullish on Canadian equities in recent industry polling.
Growth spending now tops the list for 41 percent of investors, a sharp jump from 18 percent in spring.
Macro factors continue to support the asset class:
- 79 percent of investors say constraints on Middle Eastern exports make them likelier to back Canadian energy
- 89 percent of respondents view Ottawa’s approach to energy expansion positively
- Strong majorities expect positive investment decisions on Pacific Link/Pathways, Prairie Connector and Ksi Lisims
A sentiment gauge, not a forecast
Despite the bullish backdrop, caution remains. The proportion of investors expecting energy equities to outperform the S&P/TSX Composite dropped to 63 percent from 76 percent. Federal energy and environmental policy remains cited as the primary downside risk.
Because the survey reflects sentiment among capital markets participants rather than a strict return forecast, financial advisors should evaluate the findings within client portfolios:
- Assess concentration risk: Check underlying exposures in client portfolios. Broad Canadian equity index funds often carry heavy energy weightings, which can create unintended concentration risk. A PICTON Investments poll previously highlighted a gap between investor confidence in diversification and their understanding of concentration risk.
- Revisit yield strategies: A shift toward growth spending may reduce cash flow directed to share buybacks or dividend increases. Review dividend-focused strategies that rely heavily on energy distributions.
- Monitor catalysts: Track progress on export project approvals and baseline commodity prices, which remain the core drivers of corporate cash flow.
- Maintain disciplined portfolio construction: Frame the survey’s findings as an indicator of market sentiment. Ensure any sector overweights are accompanied by clear rebalancing guidelines and risk controls
The ATB Cormark survey signals a sector in transition, with institutional confidence rebuilding and growth back on the agenda. For advisors, the more useful read is the shift in how investors are allocating, not just the bullish headline. Treat it as one signal among many, and let portfolio construction do the rest.
