Canada’s oil-producing province of Alberta on Thursday forecast a budget deficit of C$5.2 billion ($3.5 billion) for the 2025/26 fiscal year if U.S. tariffs are implemented and decrease government revenues and slow economic growth.
The outlook reflects a dramatic reversal of Alberta’s fiscal health, following what is expected to be a C$5.8-billion budget surplus in the current fiscal year, and illustrates the wide-spread uncertainty Canadian policy-makers are facing as they grapple with the tariffs situation.
“How do you plan for a budget when there are so many unknowns, when you have so much unpredictability with the U.S. president and what he may or may not say in the coming days, weeks and months?” Alberta’s Finance Minister Nate Horner told reporters.
The province estimated its revenue for 2025-26 at C$74 billion, C$6.6 billion lower than its 2024-25 third quarter forecast of C$81 billion, largely due to lower expected oil prices and royalties.
It said its Gross Domestic Product growth is forecast to decelerate to 1.8% in 2025 and 1.7% in 2026, after expanding an estimated 3% last year.
Alberta said it is also forecasting deficits for the 2026/27 and 2027/28 fiscal years, of C$2.4 billion and C$2.0 billion respectively.
In its annual budget document, Alberta said its projections reflect an anticipated “moderate” U.S.-Canada trade conflict of potential tariffs and retaliatory measures.
Alberta’s budget is based on an analysis that a 25% tariff would be unsustainable for the U.S. economy, and reflects what the province believes is a more likely 15% average tariff for the year on most goods and a 10% tariff on oil, Horner said.
He emphasized Alberta has no knowledge of what Trump plans to do beyond what the president has said publicly, and said the province is simply making its “best and most reasonable guess” at what it is facing.
(Reporting by Amanda Stephenson; Editing by Caroline Stauffer)