Alberta Fiscal Deficit on Track for Record-Breaking $10 Billion in 2026-27
Alberta's fiscal deficit is expected to reach almost $10 billion in the fiscal year 2026-27, according to estimates by Charles St-Arnaud, Chief Economist at Servus Credit Union. The current budget deficit of $6.4 billion is expected to widen by about $2.9 billion next year due to lower oil prices and a stronger Canadian dollar.
The deficit would be even higher without the narrowing of the WCS-WTI spread due to the expanded TMX pipeline, which has boosted oil revenues by an estimated $26 billion since its opening. However, any further narrowing of this spread is unlikely, as the oil differential is roughly at its fair value.
The estimate is highly sensitive to assumptions about oil prices, and it's almost impossible to balance the budget for 2026-27 unless WTI oil prices rise to at least $75. This is a significant challenge for the provincial government, which relies heavily on non-renewable resource royalties to fund its operations.