Alberta Legislature

By Lisa Johnson, The Canadian Press

Provincial Politics

Multibillion-dollar budget deficit on tap as Alberta introduces its 2026 budget

Feb 26, 2026 | 9:41 AM

It’s budget day in Alberta, and the overarching question is not whether the budget will show a deficit, but exactly how many billions of dollars in the red it will be.

Premier Danielle Smith has signalled for weeks that the deficit is going to be, in her words, “significant” but has not provided a dollar figure.

She says the main culprit is low oil prices but has also pointed to the costs associated with sharp population growth, blaming the previous federal government for allowing immigration levels to spike.

Despite the red ink, Smith has said her government won’t look to tax hikes and “deep” service cuts to balance the books.

Her United Conservative government has already offered details about some key spending initiatives, including $10.8 billion on education, a seven per cent increase from last year’s budget.

It has also touted a 22 per cent increase to spending on doctors, promising $7.7 billion for pay and recruitment efforts.

Alberta’s financial fate has long been tethered to a roller-coaster of oil and gas revenues, and the province does not charge a provincial sales tax.

On Wednesday, Finance Minister Nate Horner told reporters that the province has in past years relied on resource revenues of $20 billion or more, but said this time around that number will be “dramatically lower than that.”

He said population growth has put pressure on health and education spending, along with increased construction costs.

He said there’s going to be an “ongoing” conversation about the extent to which revenue, taxation levels and cutting expenses factor into provincial debt.

“Affordability is still a major challenge across the province, and I would say we think that Alberta’s balance sheet is able to weather this (better) than many Albertan households,” he said.

Horner said a five per cent provincial sales tax in an economy like Alberta’s could drive about $6 billion in revenue, but said he’s not promoting a referendum on a potential PST “right now.”

In the current budget year, which runs to the end of March, Alberta is forecasting a $6.4-billion deficit based on a reduced average price of West Texas Intermediate, the North American benchmark for oil, at US$61.50 a barrel.

Smith said they would have needed oil to average US$74 a barrel this year to avoid a deficit.

Opposition NDP Leader Naheed Nenshi says the budget is one more tangible indicator of a government that doesn’t know how to govern.

Nenshi told reporters Wednesday that life has become more expensive under the UCP, the health-care system has “collapsed” and people are losing faith in the education system.

“They can’t balance the budget, and they can’t invest in the things that people want, and so this budget is a chance for them to turn it around — and they won’t be able to turn it around,” he said.

The NDP says rather than take responsibility for the budget, Smith prefers to blame immigrants and oil.

“These are all the results of choices that this government has made,” Nenshi said.

This report by The Canadian Press was first published Feb. 26, 2026.