The once debt-free Alberta government projects three consecutive years of red ink and increased borrowing to fund critical public services.
Finance Minister Nate Horner says his United Conservative Party government must break some of its own fiscal restraint laws to weather an increase in population that came without an economic boom.
The province is projecting a $9.4-billion deficit for the upcoming fiscal year, which Horner described as “a tough pill to swallow” in a news conference Thursday afternoon.
But moving away from the yo-yo of provincial revenue that rises and falls along with oil and gas resource royalties would require Albertans to reconsider their aversion to taxes, Horner suggested on Thursday.
“If Albertans want to give up some of that tax advantage to get off the roller-coaster, that’s a conversation we can have,” he told reporters.
The province predicts the average price of benchmark West Texas Intermediate oil to be $60.50 US per barrel.
Horner tabled a $83.9-billion proposed 2026-27 budget in the Alberta legislature on Thursday afternoon, which is about a five per cent increase in spending from the current year.
Officials estimate revenue to be $74.6 billion, which is slightly lower than what the province hopes to collect this year.
After four years of posting surpluses, allowing the province to pay off some of its debt and bolster investments in the Heritage Savings Trust Fund, Albertans must grapple with a debt load slated to hit $109 billion by March of 2027 and potentially $138 billion by 2029.
Anticipating criticism from both those with a distaste for debt and those who want to see more spending, Horner said the government is left with few expenses left available to cut.
Horner said he doesn’t have a mandate from Albertans for broad tax increases, nor will he directly seek one, but hopes families talk about the challenge around their kitchen tables.
The UCP government has adopted legislation to control its spending, requiring mostly balanced budgets, no more than three years of deficit budgets, and limits on any deficits.
The 2026-27 proposed budget is poised to break the law in at least two ways, officials said.
Horner said that bothers him more than anyone else.
“The consequences are political,” he said. “We created these rules, and I’m breaking them.”
Premier Danielle Smith dropped some budget clues earlier this week, committing to increasing the health and education budgets to help catch up with growing needs.
Although Alberta’s population growth is forecast to slow down, Horner said the province has substantial catch up work to build enough schools, hospitals, and health facilities for the province of five million people.
