Alberta budget projects 3 years of multibillion-dollar deficits

Alberta’s 2026 budget forecasts three consecutive deficits totalling nearly $24 billion, pushing the province’s debt load to an estimated $137.5 billion by 2029 while maintaining the lowest overall taxes in Canada.

The United Conservative Party (UCP) government plans a $9.4 billion deficit in 2026, followed by $7.6 billion in 2027 and $6.9 billion in 2028.

The rising debt breaches limits set out in Alberta’s fiscal framework, a point Finance Minister Nate Horner acknowledged while signalling the rules may need updating.

“Our government created them; it means it hurts me more than anyone else to break them,” Horner said. “I don’t want to just repeal them. I want to find some rules that continue to restrain us, but allow us the flexibility to do what Alberta needs.”

Revenues are projected at $74.6 billion, down largely because of a $3 billion drop in bitumen royalties. Operating expenses will reach $83.9 billion, driven by population growth, higher wages, and record spending in health and education.

Opposition NDP leader Naheed Nenshi says the current government has six times as much royalty revenue from resources than Rachel Notley did when she was premier, and still are unable to balance the budget.

“Danielle Smith and the UCP just saddled future generations with billions and billions of dollars of debt, with no path to balance,” Nenshi said. “They are doubling the provincial debt in only three years.”

Education funding will rise 7.2 per cent to $10.8 billion, supporting 3,000 new teachers and 1,500 educational assistants over three years. Health spending will increase 5.8 per cent to $34.4 billion.

The budget introduces several smaller revenue measures, including higher education property taxes, a tourism levy increase worth $66 million annually, a new 6 per cent vehicle rental tax, and 30 fee increases across government services.

Horner said balancing the budget would require cuts so deep they are not under consideration, and he has no mandate to pursue broad tax increases.

“I could completely cut K-12 education and I might have enough money left over to make homeschooling very robust,” said Horner. “That’s what we’re talking about here, how dramatic this is.”

Premier Danielle Smith has promised no major cuts or tax hikes.

“We’re the government that cut tax for the lower bracket,” Horner said. “Because of these affordability concerns, and frankly, because our balance sheet is in better condition than that of many Alberta households.”

“We’re going to weather this for them and keep an eye towards the future.”

The province’s three‑year $28.3 billion capital plan includes $1 billion for LRT construction in Calgary and Edmonton, more than $1 billion for new schools, and $239 million for the redevelopment of Red Deer Regional Hospital.

Planning funds are allocated for new hospital towers in Edmonton and a stand‑alone Stollery Children’s Hospital, but construction dollars are not included.

Despite rising debt, Alberta remains the lowest‑tax jurisdiction in the country.

Including a provincial sales tax and other charges, Alberta could collect $17 billion more annually under British Columbia’s tax structure and $35 billion more under Prince Edward Island’s.

With files from Sean Amato and The Canadian Press