Recovery built to last

After the worst recession in a generation, things are looking up. Jobs are up, the deficit is down, and Alberta’s economy has been growing faster than anywhere in Canada.

Budget 2018 is focused on extending the recovery to all Albertans and continuing to build a more resilient, diversified and stable economy that is less vulnerable to oil price shocks — a recovery that is built to last.

The plan is built on three pillars:

  • Diversifying the economy – fighting for market access, adding value to our energy products and supporting new and developing industries.
  • Protecting vital public services – making sure loved ones get the care they need, young people get the best education possible and no one is left behind.
  • Returning to balance – investing tax dollars where they are needed most, while eliminating waste and controlling spending to return to balance by 2023-24.


Diversifying the economy

A growing and diverse economy benefits all Albertans.

Budget 2018 supports developing industries to help move Alberta off the resource revenue rollercoaster and get more value for our oil and gas resources while we continue to fight for market access for Alberta’s energy products.

These programs stimulate growth across sectors, create jobs and open doors for entrepreneurs to start and expand a business.

Diversification within the energy sector

As we work to get pipelines built to access new markets and receive better value for our resources, we will also do more to add value to our resources right here at home.

  • $1 billion in grants and loan guarantees to encourage companies to build 2 to 5 bitumen upgrading facilities to increase the value of our energy resources before shipping.
  • $500 million in royalty credits to initiate a second phase of the successful Petrochemicals Diversification Program to encourage companies to build up to 3 manufacturing facilities that turn petrochemicals into more valuable products such as plastics, fabrics and electronics.
  • $500 million in grants and loan guarantees for a Petrochemical Feedstock Infrastructure Program to encourage the construction of new facilities to capture natural gas liquids required for petrochemical manufacturing, such as ethane, methane and butane.

Visit Bill 1: The Energy Diversification Act to learn more.

Diversification across our economy

While we work to diversify our traditional strengths in the energy sector, we will also diversify by helping other sectors of the economy grow and create good-paying jobs.

  • $60 million a year to extend the Alberta Investor and the Capital Investment Tax Credit programs to 2021-22 to foster investment, encourage innovation and accelerate growth in new industries. These two programs have already supported more than $1 billion in private-sector capital projects.
  • $20 million a year by 2020-21 for a new Interactive Digital Media Tax Credit that will attract more tech entrepreneurs to Alberta, and retain Alberta’s homegrown talent to inspire the next generation of tech innovators.
  • 3,000 new post-secondary technology spaces over the next 5 years and new scholarships to support technology and other emerging sectors like life sciences, clean technology and health innovation.

Visit Bill 2: The Growth and Diversification Act to learn more.


Protecting vital public services

During the downturn, we supported Albertans by investing in healthcare, education and social services and taking steps to make life more affordable for families.

While the economy is now recovering, Budget 2018 will continue to focus on these vital services to make sure our loved ones get the care they need, young people get the best education possible and no one is left behind.

  • Health

    We’re making sure our loved ones get the care they need by investing in publicly funded health programs, services and capital projects.

    $22.1 billion for Health to:

    • build high-quality health facilities such as the Calgary Cancer Centre and the new hospital in Edmonton
    • open hundreds of continuing care beds in 2018-19 to support the shift to better community-based care
    • provide addictions and mental health support and respond to the ongoing opioid crisis
    • reduce the cost of prescription drugs
  • Education: Kindergarten to post-secondary

    Alberta’s young population continued to grow through the recession. From kindergarten to post-secondary, we’re investing $14.5 billion to ensure our young people get the best education possible.

    $8.4 billion for K-12 students to:

    • fully fund enrolment growth to 2.2%, or 15,000 new students
    • add 900 more teachers and support staff to the system
    • provide an inclusive education so students have equitable opportunities to learn in safe and caring learning environments
    • reduce school and transportation fees
    • strengthen educational outcomes and create opportunities for Indigenous students
    • expand the school nutrition program so approximately 30,000 students are provided with daily meals in the 2018-19 school year

    $6.1 billion for post-secondary students to:

    • increase post-secondary institution base operating grant funding by 2%
    • fund an extended tuition freeze for a fourth year to keep education more affordable
    • begin investing in 3,000 new technology spaces over five years to develop a high-tech workforce
    • develop a new scholarship program for technology and other emerging sectors, starting in 2019-20, so Alberta’s talent can thrive and prepare for the jobs of the future
    • train apprentices to meet future jobsite demands and support the economic recovery
  • Social services and justice

    We’re taking steps to make life more affordable for families and ensure no one is left behind.

    $3.7 billion for Community and Social Services to:

    • deliver quality programs to help Albertans with disabilities lead meaningful lives in inclusive, welcoming communities
    • establish the Advocate for Persons with Disabilities to promote the rights and interests of people with disabilities
    • support increased demand for PDD and AISH programs
    • provide income support and career counselling services to help Albertans meet their basic needs and rejoin the workforce
    • review the Persons with Developmental Disabilities program to ensure Albertans living with disabilities get the right supports
    • provide safe homes and supports for Albertans affected by homelessness or family violence
    • support initiatives that make our communities strong, welcoming and violence-free

    $1.5 billion for Children’s Services to:

    • strengthen the child intervention system to enhance the safety and well-being of children and youth
    • support quality, accessible and affordable child care to help working parents
    • support the safety, well-being and resiliency of children, youth and families in their homes in their communities
    • provide direct financial assistance to lower- and middle-income families through the Alberta Child Benefit program

    $683 million for Seniors and Housing to:

    • develop a sustainable affordable housing system for seniors and low-income Albertans
    • promote the well-being of Alberta’s seniors through financial assistance and health benefits
    • provide renovation grants so seniors can stay in their home longer
    • introduce an energy savings program to retrofit affordable housing units to reduce emissions and utility costs for housing providers and tenants

    $1.47 billion for Justice and Solicitor General to:

    • ensure Albertans’ security and access to justice through efficient functioning of courts, corrections and law enforcement
    • address justice system pressures in courts and prosecution services
    • reduce crime in rural communities

    $223 million for Labour to:

    • support updated labour laws for safe, fair and healthy workplaces
    • establish a fair practices office and medical panels office to ensure the workers’ compensation system is fair and better supports injured workers
    • provide skills and training support to help workers participate in the labour market
  • Indigenous relations, municipalities and transportation

    We’re supporting strong, vibrant communities and people who fully participate in a prosperous, competitive and diverse Alberta.

    $190 million for Indigenous Relations to:

    • support First Nations’ economic, social and community priorities
    • foster relationships with Indigenous peoples and support initiatives in response to the United Nations Declaration on the Rights of Indigenous Peoples and implement Protocol Agreements
    • consult and engage on priority areas such as climate change, natural resource development, caribou range and land use planning

    $1.2 billion for Municipal Affairs to:

    • provide infrastructure grants through the Municipal Sustainability Initiative (MSI)
    • work with municipalities to develop a new infrastructure grant program to replace the MSI
    • enhance public safety through updates to building codes and oversight in fire safety
    • boost Alberta’s ability to safeguard against and respond to emergencies
    • support the provincial library network to expand resources and services available to families and Indigenous communities

    $1.5 billion for Transportation to:

    • develop key economic corridors, modern public transportation, roads, bridges and other critical infrastructure
    • launch a rural public transportation pilot program to connect residents in rural communities
    • provide grants for priority public transit projects and critical drinking water and wastewater facilities
    • maintain 31,400 kilometres of highways – the largest number of kilometres per capita in Canada
  • Agriculture, resource management, recreation and culture

    $1.1 billion for Agriculture and Forestry to:

    • support sustainable growth of the agriculture and forestry sector through innovation, economic diversification and market access
    • adopt innovation processes and technologies and promote value-added production and commercialization
    • ensure food safety and animal health
    • support small brewers' ability to invest in their business, launch new products and develop new markets
    • fund wildfire prevention and suppression initiatives

    $526 million for Environment and Parks to:

    • develop and implement regional land use plans
    • conserve nature and improve biodiversity through parks and protected areas
    • develop new Alberta Parks capital infrastructure
    • anticipate and minimize the impact of catastrophic events such as floods, droughts, human-wildlife conflicts and invasive species

    $381 million for Culture and Tourism to:

    • fund Alberta’s arts and cultural industries and provide support through the Alberta Media Fund and the Alberta Foundation for the Arts
    • support the growth of new and expanded tourism attractions, destinations and experiences
    • support the recreation, physical activity and recreation sectors to deliver quality programs, and host the 2019 Canada Winter Games in Red Deer
    • showcase Alberta’s heritage through provincial museums, historic sites and archives, and support heritage preservation through the Alberta Historical Resources Foundation
    • strengthen the capacity of Alberta’s non-profit/voluntary sector
    • provide grants to help fund community projects and host events
    • implement a French Policy for Alberta to deliver government services in French
  • Government services

    $511 million to Service Alberta to:

    • strengthen consumer protections and support a level playing field for businesses to compete
    • provide motor vehicle, registry, land titles and consumer awareness services to Albertans
    • consolidate information technology infrastructure
    • procure an enterprise resource-planning solution to connect finance and human resource functions to make government more effective and efficient

    $19 million for Executive Council to:

    • support cabinet and policy coordination
    • build and maintain relationships with federal, provincial and territorial governments

    $670 million for Infrastructure to:

    • design, build, manage and maintain government-owned facilities
    • ensure schools, hospitals and other government-owned and operated infrastructure meets the needs of Albertans

    $1.6 billion for Treasury Board and Finance to:

    • continue to support effective use of government’s financial resources and ensure they are being allocated to the most important initiatives supporting the government’s priorities of creating a recovery that lasts, diversifying the economy, creating good jobs and protecting vital public services
  • Climate Leadership Plan

    $5.3 billion will be spent to advance climate leadership initiatives over the next 3 years including public transit, innovation research, energy efficiency programs, infrastructure projects and support to Indigenous communities.

    • $1.5 billion over 3 years to provide carbon levy rebates to low- and middle-income households
    • $680 million over 3 years to support Alberta’s transition away from coal-generated electricity, including financial supports for coal workers and communities, and to cap electricity prices to protect families, farms and small businesses
    • $662 million over 3 years to support energy efficiency projects to help Albertans and businesses reduce energy use
    • $145 million over 3 years to support climate leadership initiatives in Indigenous communities

    An additional $632 million will provide tax relief to businesses through the small business tax rate cut and the Capital Investment Tax Credit – Clean Tech Stream.

  • Gender budgeting

    We’re taking steps to advance equality so that everyone can participate fully in life in Alberta.

    • Providing grants to enhance women’s economic security and democratic participation, and to prevent and respond violence against women and girls through the Status of Women Grant Program
    • Creating positive benefits for working mothers and women working in child care settings by expanding the Early Learning and Child Care Centre pilot program by 4,500 affordable spaces.
    • Making life more affordable for Albertans by providing direct financial assistance to lower-income families through the Alberta Child Benefit.
    • Helping lower- and middle-income working families support their children, especially single parents who are predominantly women, with the Alberta Family Employment Tax Credit.
    • Improving the lives of Indigenous women and their communities with support for both the First Nations Women’s Council on Economic Security and the Métis Women’s Council on Economic Security.
    • Supporting the Institute for the Advancement of Aboriginal Women in their work to bring about greater opportunity and social equality for Indigenous women in Alberta.
    • Helping survivors of sexual violence overcome barriers to participating fully in their communities by providing additional funding to assist 12 sexual assault centres and their provincial organization, the Association of Alberta Sexual Assault Services, to deliver ongoing initiatives and increased counselling services.
  • Capital plan

    Economic recovery is underway and strengthening across Alberta.

    When the price of oil collapsed, we listened to the advice of the former Governor of the Bank of Canada, David Dodge – to put Albertans to work building badly needed infrastructure, instead of making things worse. The plan is working.

    David Dodge also said that when the economy begins to recover, we should bring spending back to more normal levels. The 2018 Capital Plan does that.

    Focused on careful and responsible spending, the Capital Plan invests $26.6 billion over 5 years to build and maintain the infrastructure Alberta's families and communities need:

    • ​$6.9 billion in municipal infrastructure support
    • $5.4 billion for capital maintenance and renewal
    • $4.6 billion for health infrastructure
    • $3.3 billion for roads and bridges
    • $2.2 billion for schools
    • $2.1 billion for climate change and environmental sustainability
    • $641 million for post-secondary institutes
    • $524 million for family, social supports and housing
    • $449 million for agriculture, natural resources and industry
    • $406 million for public safety and emergency Services
    • $211 million for sports, arts, recreation and culture

    For more details, see:


Note: Ministry expense, unless otherwise stated, includes as applicable, operating expense, capital grants, amortization, inventory consumption and loss on disposal of capital assets. Some ministries also have funds under Climate Leadership Plan, disaster assistance, debt servicing costs and pension provisions, which are not counted here.


Returning to balance

When the price of oil collapsed, the recession hit Alberta hard.

Alberta’s recovering economy and growing population will increase government revenues, but they are not expected to surpass 2013-14 levels until next year.

To balance the budget by 2023-24, we will invest tax dollars where they’re needed most, eliminate waste, control spending and find efficiencies.

Path to balance

  • Manage public sector compensation, which is over half of government’s annual operating expense, by:
    • reaching practical agreements with labour unions
    • continuing with a salary freeze on non-union employees in the public sector
    • cutting the salaries and eliminating perks and bonuses for some of the highest-paid executives of Alberta’s agencies, boards and commissions
    • keeping the size of the Alberta Public Service flat
  • Keep health spending growth below population growth and inflation. Health spending is more than 40% of government’s annual operating expense.
  • Develop a new fiscal relationship with municipalities where grants under the Municipal Sustainability Initiative (MSI) are adjusted while the province returns to balance and a new infrastructure grant program to replace the MSI is developed, with a funding formula based on revenue sharing.
  • Return capital spending to normal levels as the economic recovery strengthens.
  • Dissolve or amalgamate government agencies, boards and commissions.
  • Transform corporate services across government including communications, finance, human resources and information technologies to deliver better services at a lower cost.
  • Continue to tightly manage discretionary spending across government.

Surplus / Deficits

By implementing the cost constraints identified above, the deficit improves each year to arrive at a projected surplus of $0.7 billion in 2023-24.

More detail is included in the Path to Balance chapter of the 2018-21 Fiscal Plan.

Chart 1: Budget 2018 surplus / deficits (billions of dollars)

Net-debt-to-GDP ratio

We’re committed to maintaining one of the lowest net debt to nominal GDP ratios among the provinces.

Chart 2: Net-debt-to-GDP ratio
2017-18 Interprovincial comparison

Sources: RBC Canadian Federal and Provincial Fiscal Tables, February 28, 2018

Risk adjustment

Due to the volatility of oil prices, Alberta’s revenue is extremely difficult to forecast.

To help protect against a sudden, unpredicted decline in oil prices, Budget 2018 continues to include a risk adjustment factor, which ensures a level of safety and prudence in Alberta’s budget and fiscal planning.

The risk adjustment is $500 million in 2018-19 and increases to $700 million in 2019-20 and then to $1 billion in 2020-21.

Table 1: Budget 2018 - key fiscal metrics (billions of dollars)

  2016-17 Actual 2017-18 Budget 2017-18 Forecast 2018-19 Estimate 2019-20 Target 2020-21 Target
Total Revenue 42.3 44.9 46.9 47.9 50.6 53.8
Total Expense 53.1 54.9 55.9 56.2 57.8 59.8
Risk Adjustment - (0.5) - (0.5) (0.7) (1.0)
Surplus / (Deficit) (10.8) (10.5) (9.1) (8.8) (7.9) (7.0)
Other Key Metrics:
Capital / Other Non-financial Assets 49.4 52.7 52.0 53.8 55.3 56.8
Heritage Fund Year-end Balances 15.4 15.7 15.6 16.0 16.3 16.6
Net Financial Assets / Net Debt (8.9) (22.6) (20.3) (30.5) (39.8) (48.2)
Net Debt to Nominal GDP Ratio 2.8% 7.0% 6.0% 8.7% 10.8% 12.4%