Alberta Budget 2026: Complete Overview and Analysis
Alberta Budget 2026 projects a $9.4 billion deficit on $74.6 billion in revenue, with $1.9B in new health funding and a $28.3B capital plan.
The Big Picture
Alberta's Budget 2026 represents a sharp fiscal pivot. After posting an $8.3 billion surplus in 2024-25, the province now faces a $9.4 billion deficit in 2026-27 — a swing of nearly $18 billion in two fiscal years.
The culprit is primarily oil. With West Texas Intermediate crude forecast at US$60.50 per barrel (down from US$74.34 in 2024-25 actual), non-renewable resource revenue plunges by $3.1 billion from the 2025-26 forecast. Combined with continued spending growth to address population-driven service demands, the result is Alberta's largest projected deficit since the COVID-19 pandemic.
Total revenue is estimated at $74.6 billion in 2026-27, essentially flat with the 2025-26 forecast of $75.3 billion. Total expense climbs to $83.9 billion, including a $2 billion contingency. The deficit trajectory narrows modestly over the three-year forecast — $7.6 billion in 2027-28 and $6.9 billion in 2028-29 — but no return to balance is visible within the planning horizon.
Revenue: Oil Down, Taxes Up
The revenue story is one of shifting composition. Non-renewable resource revenue drops to $13.2 billion (18% of total revenue), down from $16.3 billion in 2025-26. Bitumen royalties alone fall from $12.7 billion to $9.7 billion, a 24% decline driven by the lower WTI forecast and wider WCS differentials.
Tax revenue partially offsets the oil decline, rising to $30.5 billion (41% of total revenue). Personal income tax revenue grows to $15.9 billion, reflecting both wage growth and the full-year effect of the tax bracket changes introduced in Budget 2025. Corporate income tax holds relatively steady at $7.3 billion despite trade headwinds.
| Revenue Source | 2025-26 Forecast | 2026-27 Estimate | Change |
|---|---|---|---|
| Personal income tax | $14,771M | $15,933M | +$1,162M |
| Corporate income tax | $7,420M | $7,300M | -$120M |
| Other taxes | $6,603M | $7,237M | +$634M |
| Bitumen royalty | $12,669M | $9,688M | -$2,981M |
| Other resource revenue | $3,617M | $3,525M | -$92M |
| Federal transfers | $13,566M | $13,715M | +$149M |
| Investment income | $4,568M | $4,358M | -$210M |
| Other sources | $12,079M | $12,794M | +$715M |
| Total Revenue | $75,292M | $74,550M | -$742M |
Federal transfers remain relatively stable at $13.7 billion, growing modestly as Alberta's rising share of Canada's population increases its allocation of the Canada Health Transfer and Canada Social Transfer.
Expenditure: Health and Education Drive Growth
Total expense of $83.9 billion reflects continued investment in core services under demographic pressure. Operating expense rises 5% to $70.4 billion from the 2025-26 forecast.
The four health ministries — Hospital and Surgical Health Services, Primary and Preventative Health Services, Assisted Living and Social Services, and Mental Health and Addiction — collectively account for over $50.8 billion, or 61% of total program expense. Budget 2026 includes $1.9 billion in new health funding across the system.
| Top Ministries by Spending | 2026-27 Estimate |
|---|---|
| Hospital and Surgical Health Services | $13,832M |
| Education and Childcare | $13,436M |
| Primary and Preventative Health Services | $12,653M |
| Assisted Living and Social Services | $12,233M |
| Advanced Education | $7,738M |
| Transportation and Economic Corridors | $2,998M |
| Debt servicing costs | $3,407M |
Education and Childcare receives $13.4 billion, including $722 million in new funding for enrolment growth, teacher compensation, and classroom conditions. Advanced Education holds at $7.7 billion with targeted post-secondary seat expansion.
Debt servicing costs rise to $3.4 billion in 2026-27, forecast to reach $4.9 billion by 2028-29, consuming an increasing share of government resources.
The contingency drops to $2 billion from $4 billion in Budget 2025, as most major collective bargaining agreements have been settled and the government returns to a more normal provision level.
Capital Plan: $28.3 Billion Over Three Years
The three-year capital plan totals $28.3 billion — $2.2 billion more than Budget 2025's plan. Major allocations include:
- Transportation and Economic Corridors: $8.3 billion (including $2.4 billion for Edmonton and Calgary LRT)
- Infrastructure (health, school, justice facilities): $4.8 billion
- Education and Childcare: $4.0 billion (including $2.5 billion for previously announced schools)
- Municipal Affairs: $3.5 billion (including $2.6 billion Local Government Fiscal Framework)
- Assisted Living and Social Services: $2.2 billion (including $923M for continuing care)
- Advanced Education: $1.8 billion (including NAIT Advanced Skills Centre at $384M)
Notable new capital commitments include the Red Deer Regional Hospital Centre Redevelopment at $1.0 billion over three years, the Calgary River District and Event Centre at $202 million, and Compassionate Intervention Centres for mental health at $319 million.
Economic Assumptions
The budget is built on cautious energy price assumptions. WTI at US$60.50/bbl is well below recent private-sector forecasts, providing a modest buffer. The light-heavy differential is assumed at US$13.00/bbl, and the Alberta Reference Price for natural gas at C$3.00/GJ — a meaningful rebound from $1.70/GJ in 2025-26.
Alberta's real GDP is forecast to grow 1.8% in 2026, slower than the 2.2% estimated for 2025. Population growth slows sharply to 1.1% from 2.5%, reflecting federal immigration policy changes and net outflows of non-permanent residents. The unemployment rate is forecast at 6.6%, improving from 7.2% in 2025.
Debt and Fiscal Position
The most consequential long-term impact is on the province's balance sheet. Taxpayer-supported debt is projected at $108.9 billion by the end of 2026-27 and $137.5 billion by 2028-29. The net debt-to-GDP ratio rises from 8.3% to 10.5% in 2026-27 and 12.9% by 2028-29.
The Heritage Fund continues to grow through retained investment income, with a stated government target of $250 billion by 2050. However, no surplus cash is available for additional contributions through the forecast period.
Net Assessment
Budget 2026 is a holding-pattern budget in a difficult fiscal environment. The government is maintaining service levels — and even increasing health and education spending — while absorbing a dramatic oil price downshift. The resulting deficits are large but narrowing, and the budget assumptions are conservative enough (particularly on oil) to allow for upside surprises.
The risk is structural. If oil prices remain in the US$60 range and spending continues to grow at population-plus-inflation rates, Alberta faces persistent deficits that erode its fiscal advantage over other provinces. The government has acknowledged this by signalling a fiscal framework review, but Budget 2026 does not itself contain material restraint measures. The core question this budget leaves unanswered: what does fiscal sustainability look like in a post-$70 oil world?