Albertans brace for finance minister to present 2nd consecutive deficit budget

After weeks of hearing warnings about a grim balance sheet, Albertans will be presented with the United Conservative government's proposed 2026-27 provincial budget on Thursday afternoon.

On Wednesday, Finance Minister Nate Horner said the days of $20-million-plus oil and gas royalties gushing into provincial coffers will be a memory, as provincial economists predict resource revenues "dramatically lower than that."

Like last year, when falling oil prices and rising costs also prompted a deficit, Horner said he doesn't want to increase taxes for Albertans already struggling with affordability.

"We think that Alberta's balance sheet is able to weather this [better] than many Albertan households," he told reporters at the legislature.

Horner said he hopes the budget prompts kitchen-table conversations about how the province generates revenue. He added that Albertans have no appetite for a sales tax.

At a news conference on Wednesday, Premier Danielle Smith reiterated her message about "tough choices" in spending.

"Alberta, like other jurisdictions in Canada and around the world, has been facing challenges ranging from trade disruptions to supply chain issues to volatile commodities markets," she said.

"This year, we're dealing with a significant deficit resulting from the twin pressures of low energy prices and near record-high population growth. "

Smith has said "unsustainable" population growth, facilitated by federal immigration policy, has put unanticipated pressure on the province's health, education and social support systems along with infrastructure. Most of the influx to the province occurred in 2023 and 2024.

Smith also said her government will shield important public services from cuts, and has announced a seven per cent increase to operating funding for pre-kindergarten to Grade 12 education.

University of Calgary economics professor Lindsay Tedds said immigration, soft oil prices and Canadian oil selling at a larger discount are not solely to blame for Alberta's financial position.

Oil prices had already softened last year when Smith's government introduced the addition of a new, lower tax bracket for the first $60,000 of income, she said.

"It wasn't the NDP," Tedds said of the former provincial government booted from office in 2019. "This is political gamesmanship that made Alberta vulnerable to the swing."

Tedds said the government isn't protecting all social programs either, pointing to limits on benefit increases, as well as how it is forcing thousands of people with disabilities onto a new program with lower benefits.