Global economic uncertainty, lower oil prices and rapid population growth are placing real pressure on Alberta’s finances and public services.

Alberta is feeling extreme pressures. Unprecedented growth in recent years has stretched essential service capacities beyond what the system is able to manage. More people mean Alberta needs more classrooms, more hospital capacity, more infrastructure and more support systems – all at a time when non-renewable resource revenue is declining. These pressures are not only increasing the deficit, but also pushing the province to project three years of substantial deficits, if today’s revenue and expense projections hold.

If passed, Budget 2026 includes deficits of $9.4 billion, $7.6 billion and $6.9 billion over the next three years.

To respond to growing fiscal pressure, Budget 2026 makes careful investments while strengthening revenue through economic development, reinvesting in the Heritage Fund, investing in our public service, building a stronger workforce and ensuring everyone pays their fair share.

With $34.4 billion in total expense for the health system, Budget 2026 supports more surgeries, strengthens access to front-line family doctors and nurse practitioners and adds hundreds of treatment beds for people with mental health and addiction issues.

If passed, Budget 2026 invests $10.8 billion in the education system, a 7.2 per cent increase over 2025-26. This investment will help hire more teachers and educational assistants to support growing classes and classroom complexity. Budget 2026 is also investing $3.3 billion over three years into building educational infrastructure across the province.

“Our responsibility is to the families raising kids, the workers keeping our economy moving, and the communities people rely on every day. This budget protects the services Albertans depend on while making sure we don’t pass on today’s challenges to the next generation. It’s about seeking stability when times are tough and making choices that keep Alberta strong, long term.”

Nate Horner, President of Treasury Board and Minister of Finance

In 2026-27, Alberta’s economy and fiscal outlook continue to face challenges from the shifting global economic landscape. With the U.S. introducing broad tariffs last year, trade uncertainty and low oil prices will continue to slow growth this year. The province’s real GDP is forecast to slow to 1.8 per cent. A slowdown in population growth will weigh on activity, but will also take the pressure off the labour market and make it easier for Albertans to find good jobs. Inflation is forecast to remain near two per cent, which will help families manage everyday costs and provide relief for household budgets.  

Even with weaker oil prices, Alberta’s energy sector continues to be a source of strength. Alberta’s energy industry is producing and selling to more markets around the world. Manufacturing is starting to rebound after last year’s trade challenges, and businesses are expected to slowly start investing again as uncertainty settles.

Despite signs of recovery, broader economic pressures highlight the need for careful planning and decisive action to keep Alberta on a steady path. When conditions tighten, Alberta’s government does not walk away from the challenge. Alberta’s government is focused on what matters, protecting what counts, acting responsibly and charting a steady path forward for the province.

Budget 2026 invests:

  • $10.8 billion in operating expenses for education, an increase of 7.2 per cent from 2025-26, will support the hiring of at least 3,000 new teachers and 1,500 new educational assistants over three years.
  • $3.3 billion for infrastructure funding will support the work to build and modernize 161 schools, including the fast-tracking of 40 new school projects this year.
  • $34.4 billion in total expense across the health-care system, an increase of $1.9 billion or 5.8 per cent from the 2025-26 forecast, including:
    • $13.8 billion in Hospital and Surgical Health Services, including $525-million to complete 50,000 additional surgeries.
    • $5.9 billion for Assisted Living and Social Services, to support continuing care, assisted living services and seniors.
    • $2 billion for Mental Health and Addiction.
      • This will help prioritize front-line addiction treatment and psychiatric care and build compassionate intervention centres and mental health facilities for youth.
  • The province is also continuing to grow the Heritage Fund for what matters most: saving for the future and securing long-term growth and financial stability.
    • The fund is expected to grow to about $34 billion by the end of 2026-27, up from $31.5 billion from the 2025-26 second-quarter fiscal update.
    • A renewed Heritage Fund of $250 billion by 2050 will turn Alberta’s resource strength into lasting financial security through strategic, large-scale investments in the good years, and earnings that grow year-over-year, lessening the province’s future reliance on natural resource revenues.
  • Budget 2026’s Capital Plan includes $28.3 billion over three years, an increase of $2.2 billion or eight per cent from Budget 2025. It will build what matters in the province: schools, hospitals, roads and bridges in the province.
    • $3.3 billion over three years for educational (K-12) infrastructure.
    • $4.9 billion for health infrastructure, $1.3 billion more than Budget 2025, to build a health care system that supports the growing needs of rural and urban communities in Alberta.

Revenue

  • Total revenue in 2026-27 is forecast at $74.6 billion, a decrease of $0.7 billion from the 2025-26 third-quarter forecast of $75.3 billion.
    • The decrease in 2026-27 comes mainly from a $3.1 billion drop in non-renewable resource revenue, driven by an anticipated decline in oil prices.
    • Revenue from non-renewable resources is forecast at $13.2 billion in 2026-27, compared to the $16.3 billion forecast for 2025-26 third quarter forecast.
    • Revenue from personal income taxes is estimated at $15.9 billion in 2026-27, an increase of $1.2 billion from the 2025-26 third quarter forecast, growing in line with personal incomes and reaching $17.7 billion in 2028-29.
    • Corporate income tax revenue is estimated at $7.3 billion in 2026-27, down $0.1 billion from the third-quarter forecast for 2025-26,
      • However, it is up from Budget 2025, driven by stronger growth in corporate profits despite ongoing trade uncertainty.
      • Corporate income tax revenue is expected to grow moderately to $7.5 billion in 2027-28 and $7.6 billion in 2028-29.
    • Other tax revenue is forecast at $3.6 billion in 2026-27, $0.2 billion higher than 2025-26 budget and forecast, mostly from fuel tax and insurance tax.
    • Total revenue is forecast to grow to $78.9 billion in 2027-28 and $81.5 billion by 2028-29, led by improving oil prices and other market factors.

Expense

  • Total expense in 2026-27 is forecast at $83.9 billion, an increase of $4.5 billion or 5.6 per cent from the 2025-26 third quarter forecast.
    • Total expense is expected to be $86.5 billion in 2027-28 and $88.4 billion in 2028-29, or an increase of about 2.7 per cent per year.
  • Operating expense is estimated at $70.4 billion, an increase of $3.4 billion or five per cent from the 2025-26 third quarter forecast.
    • Operating expense grows to $72.4 billion in 2027-28 and $74.1 billion in 2028-29, an average increase of 2.6 per cent per year.
  • The budget includes just under $38 billion in 2026-27 for public sector compensation for the workers in core services of health care, education, post-secondary education and the public service.
  • A contingency of $2 billion will address unanticipated spending, including disasters and emergencies, and emerging priorities that arise during the year that are not practical to delay until the next budget.

Deficit

  • A deficit of $9.4 billion is forecast for 2026-27, up from the $4.1 billion deficit forecast at the 2025-26 third quarter.
  • The deficit is forecast to decrease to $7.6 billion and $6.9 billion for 2027-28 and 2028-29, respectively.
  • The 2026-27 projected deficit is largely the result of falling non-renewable resource revenues and increases in costs necessary to provide essential services to Albertans in the growing province.

Debt

  • Taxpayer supported debt is projected at $108.9 billion for 2026-27, up $16.8 billion from 2025-26.
  • Debt servicing costs are forecast at $3.4 billion in 2026-27, up from the $2.9 billion at the 2025-26 forecast.
  • Debt servicing costs reflect current interest rates and outstanding borrowings, and remain within sustainable limits relative to Alberta’s GDP and revenue base.

Economic outlook

  • In 2026, real gross domestic product is expected to rise 1.8 per cent – down from the estimated 2.2 per cent for 2025 – then increase to 2.3 per cent in 2027.
  • Population growth is forecast to ease to 1.1 per cent in 2026 – down from the 2.5 per cent forecast in 2025 and the record 4.7 per cent of 2024 – reflecting large net outflows of non-permanent residents and the federal government policy on lower immigration targets.
    • Growth will remain subdued at 1.1 per cent in 2027, then strengthen to 1.4 per cent in 2028 and 2029.

Energy and economic assumptions, 2026-27

  • West Texas Intermediate oil (USD/bbl)              $60.50
  • Western Canadian Select @ Hardisty (CND/bbl) $65.30
  • Light-heavy differential (USD/bbl)                      $13.00
  • ARP natural gas (CND/GJ)                               $3.00
  • Conventional crude production (000s barrels/day) 544
  • Raw bitumen production (000s barrels/day)       3,691
  • Canadian dollar exchange rate (USD¢/CAD$)   73.0
  • Interest rate (10-year Canada bonds, per cent) 3.2