Alberta Budget 2026 vs 2025: Spending Comparison
Alberta Budget 2026 vs 2025: deficit widens from $5.2B to $9.4B, oil drops to US$60.50/bbl, and total expense rises $4.5B to $83.9 billion.
Headline: A Budget Transformed in 12 Months
The distance between Budget 2025 and Budget 2026 is remarkable. One year ago, the government projected a path back toward balance — deficits of $5.2 billion, $2.4 billion, and $2.0 billion. Budget 2026 projects deficits of $9.4 billion, $7.6 billion, and $6.9 billion with no return to balance visible. The cumulative three-year deficit has gone from $9.6 billion to $23.9 billion — a $14.3 billion deterioration.
Top 5 Material Changes
1. Oil Price Assumption: US$68 → US$60.50/bbl
The single largest driver of the fiscal shift. Budget 2025 assumed WTI at US$68/bbl for 2025-26; Budget 2026 assumes US$60.50/bbl for 2026-27. With sensitivity of $680 million per dollar, this alone accounts for roughly $5.1 billion in lower resource revenue expectations. The structural oversupply narrative has replaced the geopolitical-premium narrative.
2. Deficit: $5.2B → $9.4B
The year-1 deficit nearly doubles. This reflects both the revenue decline (oil) and continued spending growth. Notably, Budget 2025 projected the 2026-27 deficit at just $2.4 billion — the actual estimate is $9.4 billion, a $7.0 billion miss.
3. Taxpayer-Supported Debt: $82.5B → $108.9B
The debt projection for 2026-27 is $26.4 billion higher than Budget 2025 forecast. This is the compounding effect of larger deficits, higher capital spending, and cash requirements. By 2028-29, debt reaches $137.5 billion — a figure not in Budget 2025's planning horizon.
4. Total Expense: $79.3B → $83.9B
Spending grew $4.6 billion (5.8%) between the two budget estimates. Health spending across the four agencies grew fastest, driven by population-related demand, compensation agreements, and system restructuring costs. The contingency was halved from $4.0 billion to $2.0 billion, partially offsetting program expense growth.
5. Population Growth Narrative: 2.5% → 1.1%
Budget 2025 grappled with the challenge of rapid population growth (4.4% in 2024) straining services. Budget 2026 faces the opposite: a sharp slowdown to 1.1% that dampens economic growth, housing construction, and consumer spending. This is a fundamentally different economic context within a single year.
Revenue Comparison
| Revenue Source | Budget 2025 (2025-26 Est.) | Budget 2026 (2026-27 Est.) | Change |
|---|---|---|---|
| Personal income tax | $15,510M | $15,933M | +$423M (+2.7%) |
| Corporate income tax | $6,764M | $7,300M | +$536M (+7.9%) |
| Other taxes | $6,563M | $7,237M | +$674M (+10.3%) |
| Bitumen royalty | $12,830M | $9,688M | -$3,142M (-24.5%) |
| Other resource revenue | $4,237M | $3,525M | -$712M (-16.8%) |
| Federal transfers | $13,305M | $13,715M | +$410M (+3.1%) |
| Investment income | $2,883M | $4,358M | +$1,475M (+51.2%) |
| Other sources | $12,046M | $12,794M | +$748M (+6.2%) |
| Total Revenue | $74,138M | $74,550M | +$412M (+0.6%) |
Total revenue is almost flat year-over-year. The collapse in resource revenue is almost exactly offset by growth in tax revenue, investment income, and other sources. This masks a major structural shift: resource revenue fell from 23% to 18% of total revenue.
Expenditure Comparison
| Ministry | Budget 2025 (2025-26 Est.) | Budget 2026 (2026-27 Est.) | Change |
|---|---|---|---|
| Hospital and Surgical Health | $12,157M | $13,832M | +$1,675M (+13.8%) |
| Education and Childcare | $12,357M | $13,436M | +$1,079M (+8.7%) |
| Primary/Preventative Health | $11,182M | $12,653M | +$1,471M (+13.2%) |
| Assisted Living/Social Services | $11,298M | $12,233M | +$935M (+8.3%) |
| Advanced Education | $7,411M | $7,738M | +$327M (+4.4%) |
| Transportation/Econ. Corridors | $2,681M | $2,998M | +$317M (+11.8%) |
| Mental Health and Addiction | $1,794M | $2,043M | +$249M (+13.9%) |
| Debt servicing costs | $2,968M | $3,407M | +$439M (+14.8%) |
| Contingency | $4,000M | $2,000M | -$2,000M (-50.0%) |
| Total Expense | $79,349M | $83,922M | +$4,573M (+5.8%) |
Health spending (four agencies combined) increased by roughly $4.3 billion, accounting for nearly all program expense growth. Debt servicing grew 15%, the fastest rate among major line items.
Assumption Changes
| Assumption | Budget 2025 | Budget 2026 | Impact |
|---|---|---|---|
| WTI oil price | US$68.00/bbl | US$60.50/bbl | ~$5.1B lower resource revenue |
| Real GDP growth (year 1) | 1.8% | 1.8% | Unchanged |
| Population growth | 2.5% | 1.1% | Sharply lower — dampens growth |
| Exchange rate | US¢69.6/CAD | US¢73.0/CAD | Stronger CAD reduces royalties |
| Natural gas price | C$2.20/GJ | C$3.00/GJ | Positive offset for gas revenue |
| CPI inflation | 2.6% | 2.1% | Lower cost pressure |
| Contingency | $4.0B | $2.0B | Reduced buffer |
| Capital Plan (3-year) | $26.1B | $28.3B | +$2.2B expansion |
The strongest offsetting positives: natural gas prices nearly doubling and a lower CPI forecast reducing spending pressure.
New and Dropped Measures
New in Budget 2026:
- Health Shared Services corporation for centralized health IT/HR/finance
- Compassionate Intervention Centres ($319M capital over 3 years)
- Alberta Broadband Strategy ($183M)
- Calgary River District and Event Centre ($202M)
- NAIT Advanced Skills Centre ($384M)
- Heritage Fund $250 billion growth target by 2050
- Fiscal framework review announced
No longer featured:
- Surplus cash allocation (no surplus cash available)
- Path to balanced budget within planning horizon
- Higher contingency provisions ($4B reduced to $2B)
Narrative Shifts
From surplus management to deficit management. Budget 2025 still operated in the language of fiscal discipline and surplus allocation. Budget 2026 is explicitly about managing deficits and reviewing the fiscal framework.
From population pressure to population slowdown. The framing has inverted — population growth went from a challenge (straining services) to a headwind (dampening economic growth).
From tariff uncertainty to tariff reality. Budget 2025 treated U.S. tariffs as a risk scenario; Budget 2026 incorporates tariffs-in-place as a baseline assumption.
From health system restructuring to implementation. The four health agencies are now operational with full budgets, and Health Shared Services adds a new coordination layer.
Net Assessment
The fiscal trajectory has worsened materially between Budget 2025 and Budget 2026. The deficit is nearly double, the debt trajectory is $26 billion higher, and no return to balance is projected. The fundamental challenge is that Alberta's spending has grown to a level that requires sustained oil prices above US$70/bbl to balance — and the market is not cooperating. The fiscal framework review signalled in Budget 2026 is the most important policy commitment in the document, because without structural reform, the current trajectory leads to net-negative assets by 2028-29.