Alberta projects $2-billion surplus after $11.4-billion turnaround in provincial finances

EDMONTON — Alberta’s first-quarter fiscal update has moved the province firmly back into the black, with total revenue now expected to reach $86.3 billion during the current fiscal year — $11.7 billion more than anticipated in February’s budget. Non-renewable resource revenue alone is forecast to reach $23 billion, an increase of $9.7 billion from the original budget projection. Corporate income tax revenue is also expected to be about $545 million higher, while other revenue sources have collectively improved by more than $1.4 billion.

The turnaround has been fuelled by a sharp increase in global oil prices. Budget 2026 was built around an average West Texas Intermediate oil price of US$60.50 per barrel, but the province has now raised its full-year assumption to US$73.50. Oil has actually averaged just above US$88 per barrel since April as conflict involving Iran disrupted global energy markets and shipping through the Strait of Hormuz. Alberta estimates that every US$1 change in the average price of WTI can move provincial revenues by roughly $680 million.

Finance Minister Jason Nixon cautioned against treating the higher revenues as permanent, pointing to volatile commodity markets and continuing uncertainty surrounding international trade. The government says it intends to maintain spending restraint rather than using the windfall to permanently expand programs. Taxpayer-supported debt is now forecast at approximately $94.8 billion by March 2027, about $14.1 billion below the estimate in February because the stronger fiscal position reduces the province’s borrowing requirements.

Alberta’s economic outlook has also improved. The province now expects real GDP to grow 2.3 per cent in 2026, half a percentage point above the budget forecast, followed by 2.5-per-cent growth in 2027. The government pointed to activity in the energy sector, stronger manufacturing and agricultural exports, consumer spending and major investment projects as contributing to the improved outlook.

The fiscal update also puts Alberta on track for what the government says could be its sixth consecutive surplus. Final audited results for 2025-26 have been delayed while the province completes accounting work connected to its restructuring of the health-care system, but Nixon said higher oil prices late in that fiscal year are expected to erase the previously projected $4.1-billion deficit and produce a fifth consecutive surplus. Those final figures are expected to be released in the fall.

Opposition NDP Leader Naheed Nenshi argued the numbers highlight Alberta’s continued dependence on volatile resource revenues. He renewed his call for the government to suspend Alberta’s 13-cent-per-litre gasoline tax and said the province should be able to balance its books without depending on geopolitical crises to drive oil prices higher.

The improved outlook also strengthens the position of the Alberta Heritage Savings Trust Fund. The province expects the fund to reach at least $32.1 billion by the end of 2026-27 and says it remains on track toward Premier Danielle Smith’s goal of growing the fund to $35 billion by the end of 2027. Despite those stronger numbers, the first-quarter update underscores the central challenge that has shaped Alberta budgets for decades: billions of dollars can be added to — or removed from — the provincial balance sheet by relatively small movements in the international price of oil.