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The outlook for Alberta’s budget in its second-quarter update remains largely unchanged from the previously gloomy forecast provided in August.
Finance Minister Nate Horner estimates that the government will end the fiscal year with a deficit of $6.4 billion, which increased by $1.2 billion from the original estimate provided in the 2025-26 budget, delivered in February.
It is a scenario similar to the one that was outlined at the end of the summer. The update cited weakening oil prices as a cause of the growing deficit and said there had been a 30 percent decline in natural resource revenues from last year.
Oil prices are expected to remain low, according to the update.
He also cites population growth and high unemployment as pressure points on the economic outlook.
The 2025-26 budget, presented just days before the United States imposed 25 percent tariffs on most imports from Canada, anticipated some economic problems. While the global economy has performed better than expected, the province says the trade conflict will have a continued impact on agriculture and manufacturing industries.
The update also shows that $881 million of contingency funds have been used this budget cycle to pay for new labor agreements. That includes agreements for teachers, health care workers and public sector employees.
The tax levy was introduced just hours after a memorandum of understanding between Alberta and the federal government on an oil pipeline to the West Coast was announced. Government officials say it is one of many signs of “light on the horizon.”
More to come.
