Alberta projects C$9.4 billion deficit on lower oil prices

Core Viewpoint - Alberta is facing a significant budget deficit of C$9.4 billion ($6.87 billion) for the 2026/27 fiscal year, attributed to lower global crude prices impacting resource revenues [1][5]. Economic Dependency - Alberta's economy is heavily reliant on oil prices, with the province being home to the Canadian oil sands, the world's third-largest oil reserve [2]. - The provincial government depends on royalties and taxes from oil and gas companies to fund essential public services such as healthcare and education [2]. Revenue Forecast - Non-renewable resource revenue is expected to account for 18% of the provincial government's total revenue in 2026/27, a decrease from 21% in 2025/26 [3]. Oil Price Projections - The benchmark West Texas Intermediate (WTI) oil price is forecasted to average $60.50 per barrel in 2026/27, down from $74.34 two years prior [4]. - A WTI oil price between $74 and $77 per barrel is required for Alberta to balance its 2026/27 budget [6]. Future Deficits - Alberta anticipates budget deficits of C$7.6 billion and C$6.9 billion for the fiscal years 2027/28 and 2028/29, respectively, which would violate provincial legislation against consecutive years of deficit financing [5]. - The projected deficit for 2026/27 exceeds the legal limit by C$4.5 billion [5]. Government Response - Alberta's Finance Minister Nate Horner acknowledged the breach of fiscal rules and indicated plans to amend these rules in light of the budgetary challenges [6].