Alberta Halts Heritage Fund Deposits Amid Projected Deficits

The Alberta government has announced that it will not contribute to the Heritage Fund this fiscal year, marking a sudden halt after $5.6 billion in contributions from 2022/23 to 2025/26.

The decision underscores the need for more robust fiscal rules to manage Alberta's volatile finances, which are heavily influenced by resource revenue from oil and gas royalties.

When times are good and resource revenue is high, the province tends to enjoy surpluses. However, when commodity prices fall, it spins into deficit. The government created a rule in 2022/23 that at least 50% of any budget surplus would be used for one-time initiatives or contributed to the Heritage Fund.

The goal is to build up the fund as a stable financial asset that could provide revenue to benefit Albertans over the long term. However, after a few years of relatively high resource revenue and budget surpluses, projected deficits have increased, with $4.1 billion in 2025/26 and $9.4 billion in 2026/27.