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Alberta's Budget Deficit Breaks Rules Amid Oil Price Slump
27 Feb
Summary
- Alberta forecasts a C$9.4 billion deficit for 2026/27.
- Low oil prices have significantly impacted government resource revenues.
- Alberta plans a broad review of finances and spending.
Alberta forecasts a budget deficit of C$9.4 billion for the 2026/27 fiscal year, a figure that breaches the province's established rules for deficit financing. This projection is largely attributed to a significant drop in global crude oil prices, which has adversely affected the government's vital resource revenues.
The economic outlook underscores Alberta's dependence on commodity market fluctuations. Consequently, the provincial government has announced a wide-ranging review of its financial management and expenditures, aiming to re-establish fiscal sustainability over the long term. The average West Texas Intermediate oil price is expected to be $60.50 per barrel in 2026/27, a decline from previous years.
Alberta is anticipating further deficits in subsequent fiscal years, potentially violating its legislation that limits consecutive years of deficit financing. The government has stated that a higher WTI oil price, between $74 and $77 per barrel, would be necessary to balance the 2026/27 budget. Rapid population growth is also cited as a contributing factor to budgetary challenges.
