Alberta Braces for Massive Deficit as Oil Prices Take a Hit

Alberta's budget is facing significant challenges due to lower oil prices. The province has forecasted a C$9.4 billion deficit for its 2026/27 fiscal year, breaking its own rules on allowable deficit financing.

The government blames the lower global crude prices that have reduced resource revenues. Alberta's economy is deeply dependent on oil prices, and it relies heavily on royalties and taxes from oil and gas companies to fund public services like healthcare and education.

The province forecasts non-renewable resource revenue will account for 18% of its total revenue in 2026/27, down from a 21% estimate for the current fiscal year. The benchmark West Texas Intermediate oil price is expected to average $60.50 per barrel in 2026/27, down from $74.34 just two years ago.

Finance Minister Nate Horner acknowledged breaking his own rules and said the province would seek to amend its fiscal rules going forward. Alberta requires a WTI oil price between $74 and $77 per barrel to balance its budget.