The Canadian oil-producing province of Alberta forecast a budget deficit of C$9.4 billion ($6.87 billion) for its 2026/27 fiscal year on Thursday, breaking its own rules on allowable deficit financing and blaming lower global crude prices that have walloped the government’s resource revenues.
The outlook reflects Alberta’s vulnerability to commodity price fluctuations, prompting the provincial government to commit to what it called a broad review of its finances and spending, aimed at restoring budget sustainability in the longer-term.
Alberta is home to the Canadian oil sands, the world’s third-largest oil reserve, and its economy is deeply dependent on global crude prices, which slumped in 2025 due to concerns about oversupply.
The provincial government also relies heavily on royalties and taxes paid by oil and gas companies to fund public services like healthcare and education.
Non-renewable resource revenue is forecast to account for 18% of the provincial government’s total revenue in 2026/27, according to budget documents, compared to a 21% estimate for 2025/26.
Alberta forecast the benchmark West Texas Intermediate oil price will average $60.50 per barrel in 2026/27, down from $74.34 just two years ago. Lower oil prices are expected to dampen corporate profits and overall incomes in the province, following what Alberta expects to be a C$4.1 billion deficit in the current 2025/26 fiscal year.
Alberta is also projecting budget deficits of C$7.6 billion and C$6.9 billion for 2027/28 and 2028/29, which would put the province in violation of its own legislation prohibiting more than three years in a row of deficit financing. The size of the projected 2026/27 deficit also exceeds what is permitted under provincial law by C$4.5 billion.
“We created these rules, and I’m breaking them. It bothers nobody more than it does me,” Alberta Finance Minister Nate Horner told reporters, adding the province will be seeking to amend its fiscal rules going forward.
The Alberta government said it would require a WTI oil price between $74 and $77 per barrel to balance its 2026/27 budget.
The province has said its budgetary woes are also due to rapid population growth, which in recent years has exceeded that of any other Canadian province.
(Reporting by Amanda Stephenson in Calgary; Editing by Nia Williams)