Alberta
Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn
From the Fraser Institute
By Tegan Hill
According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.
The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.
For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).
And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.
In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.
This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.
Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.
Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.
Of course, if the government falls back into deficit there are implications for everyday Albertans.
When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.
According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.
Author:
Canada and Alberta’s new net-zero energy deal is being promoted as progress, but it also brings rising costs. In this video, I break down the increase to Alberta’s industrial carbon price, how those costs can raise fuel, heating, and grocery prices, and why taxpayer-funded carbon-capture projects and potential pipeline delays could add even more. Here’s what this agreement could mean for Canadians.
Watch Nataliya Bankert’s latest video.
Alberta’s government will introduce a motion under the Alberta Sovereignty within a United Canada Act to defend law-abiding firearms owners.
A new motion under the Alberta Sovereignty within a United Canada Act will, if passed by the legislature, instruct all provincial entities, including law-enforcement agencies such as municipal police services and the RCMP, to decline to enforce or implement the federal gun seizure program. The motion also makes clear that Albertans have the right to use reasonable force to defend themselves, their families and their homes from intruders.
This builds on the steps Alberta has already taken to reduce crime, strengthen public safety and assert provincial jurisdiction over firearms. This includes passing the Alberta Firearms Act to establish the Alberta Chief Firearms Office, along with the Alberta Firearms Regulation and the Seizure Agent and Provider Licensing Regulation.
“It’s time for Ottawa to stop targeting the wrong people. Albertans have the right to protect their homes and their families. No one should hesitate to defend themselves when faced with a threat at their own doorway. Law-abiding citizens, hunters, farmers and sport shooters are not the source of violent crime, yet the federal government wants to confiscate their property while illegal guns pour across our borders. Alberta will not stand by while responsible gun owners are treated like criminals. This motion is about using every legal tool we have to protect their rights, uphold public safety and push back on federal overreach into provincial jurisdiction.”
“When someone breaks into your home, the law recognizes that you have enhanced rights to protect yourself and your family. Alberta is making that principle unmistakably clear: lawful, reasonable self-defence will be respected, not criminalized.”
“As an experienced former law enforcement officer, law-abiding gun owners have never been an issue, in my own personal experience, nor has there been any data to support that law-abiding gun owners are the ones that are committing violent gun crimes. The illegal guns that you see being used by criminals are typically being smuggled in from the United States. The federal government should help us strengthen the border, helping us to stop illegal guns from coming into Canada. This would further enhance safety and security for the people of Alberta and Canada as opposed to going after lawful gun owners.”
Under the Alberta Firearms Regulation, municipalities, law enforcement and police commissions must obtain approval from Alberta’s Minister of Justice before accepting funding to participate in the Assault-Style Firearms Compensation Program.
“Misguided federal initiatives such as the handgun transfer ban and the Order in Council firearms prohibitions of 2020, 2024 and 2025 have had a devastating impact on the safe, legitimate activities of the firearms community and the businesses that support it, while having no discernible effect on criminal activity. I am proud to see that the Alberta government is pushing back and supporting lawful firearms owners through these measures.”
“Licensed gun owners and all Albertans can rest assured that their government, under the leadership of the UCP, is laser focused on protecting law abiding citizens while prioritizing real public safety.”
“The Alberta Hunter Education Instructors Association will continue to support our government and the Alberta chief firearms officer in our joint quest to use safety training and education as the key tools to ensure we have safer streets and communities. Safe and responsible use of firearms in Alberta is a key part of our heritage, culture, and our rich and precious heritage.”
Key facts:
- Pursuant to the Attorney General’s recent guidance protocols, Alberta’s prosecutors will decline to prosecute offences under the federal gun seizure program when it is not in the public interest.
- The Attorney General’s recent guidance protocol directs prosecutors to not prosecute home defence offences when it is not in the public interest.
- Total spending on the federal Assault-Style Firearms Compensation Program is expected to exceed $750 million.
- The firearms motion considers the Alberta Bill of Rights, the Constitution Act, 1867 and the Criminal Code.
- Currently 10 per cent of adult Albertans are licenced to use and own firearms. There are 381,900 firearms licences in Alberta.
- Alberta has 638 licensed firearms businesses, 138 shooting ranges and 91 shooting clubs.
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