Alberta deficit projected to hit 6.5 billion – up 1.3 billion after first quarter

Q1 update: Steering through the storm

Despite global economic challenges, Alberta remains resilient, prepared to make tough yet prudent choices to support families.

Like other provinces across Canada, Alberta is facing growing financial challenges as global economic uncertainty affects Q1 projections. The first quarter update projects the 2025-26 deficit will reach $6.5 billion, up $1.3 billion from Budget 2025’s forecast. The most significant factor in the growth of the deficit is related to a 38 per cent decline of natural resource revenue, which has decreased from its peak of $25.2 billion in 2022-23 to a forecast of $15.7 billion in 2025-26.

Alberta is also facing added pressure from a growing population, which is projected to increase 2.4 per cent in 2025-26. Other external factors including lower oil prices, tariff threats and slowing global growth are impacting the province’s bottom line. Even with these challenges, Alberta remains committed to prioritizing essential services such as health care and education, while keeping everyday costs like childcare, utilities and housing affordable for families.

“We know the road ahead has its challenges, but with disciplined financial management and smart investments, we will stand by families, rein in the deficit and secure a stronger future.”

Nate Horner, President of Treasury Board and Minister of Finance

More than half, or $2.5 billion, of the $4-billion contingency set aside in Budget 2025 remains to address expense pressures this year. To date, allocations include $706 million for disaster and emergency spending, with $700 million for wildfire response and $6 million to replant trees in affected areas. Another $752 million has been allocated to cover increases not offset by dedicated revenue.

The province continues to engage with federal partners to ensure Alberta’s fiscal interests are protected, key industries are supported, and critical infrastructure is built. Despite external shocks, Alberta’s economy remains resilient. Its real GDP is forecast to lead Canada, and the private sector continues to perform strongly with investment, construction and labour market activity supporting stability.

Alberta’s government is working on a broader strategy to further diversify the economy, reduce vulnerability to oil price swings and trade disruptions, and build a stronger, more resilient Alberta.

Key facts:

Operating expense is forecast at $65 billion, $679 million more than Budget 2025. This is primarily due to an increase in public-sector wage growth.
The forecasted price of oil this year is $63 USD per barrel, a decrease of $26 USD per barrel since 2022, when the price of oil averaged over $89 USD per barrel.
In the first quarter of 2025-26, both Saskatchewan and New Brunswick exceeded their budget forecasts, facing unexpected financial pressures. Saskatchewan shifted from a projected $12-million surplus to a $349-million deficit, and New Brunswick’s deficit climbed to $668.7 million, above its budgeted $549 million.

Related information

Learn more about Budget 2025 here: Budget | Alberta.ca

Related Topics:AlbertaBudgetDeficit AlbertaQ1Update

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Premier Smith moves to protect Alberta in International Agreements

Published on October 23, 2025

Government of Alberta

Protecting Alberta’s jurisdiction

The International Agreements Act ensures Alberta’s jurisdiction is protected and decisions that shape our future are made right here at home.

This legislation draws a clear line: international agreements that touch on provincial areas of jurisdiction must be debated and passed into law in Alberta.

Alberta, not Ottawa, will decide how international agreements that affect provincial matters apply in the province.

“As we return to the legislature, our government is focused on delivering on the mandate Albertans gave us in 2023 to stand up for this province, protect our freedoms and chart our path forward. We will defend our constitutional rights, protect our province’s interests and make sure decisions that affect Albertans are made by Albertans. The federal government stands at a crossroads. Work with us, and we’ll get things done. Overstep, and Alberta will stand its ground.”

Danielle Smith, Premier

While the federal government has the power to enter into international agreements on behalf of Canada, it does not have the legal authority to impose its terms on provinces. The International Agreements Act reinforces that principle, ensuring Alberta is not bound by obligations negotiated in Ottawa that do not align with provincial priorities.

Bill 1 was introduced by Premier Danielle Smith following the fall 2025 speech from the throne as part of Alberta’s commitment to defend its sovereignty within a united Canada.

Key facts

If passed, the International Agreements Act will replace the International Trade and Investment Agreements Act.
The new legislation would expand its scope beyond trade and investment to include all areas of provincial jurisdiction.
Currently, there is no formal agreement or requirement for the federal government to consult provinces when negotiating international treaties.
Quebec’s Act respecting the exercise of the fundamental rights and prerogatives of the Québec people and the Québec State came into force in 2000.
- International agreements do not apply in Quebec unless approved by the national assembly or the provincial government.
- Quebec must give clear consent before any international agreement takes effect.

Related information

Agriculture

From Underdog to Top Broodmare

Published on October 23, 2025

Todayville

WATCH From Underdog to Top Broodmare (video)

Executive Producers Jeff Robillard (Horse Racing Alberta) and Mike Little (Shinelight Entertainment)

What began as an underdog story became a legacy of excellence. Crackers Hot Shot didn’t just race — she paved the way for future generations, and in doing so became one of the most influential producers the province has known.

The extraordinary journey of Crackers Hot Shot — once overlooked, now revered — stands as one of Alberta’s finest success stories in harness racing and breeding.

Born in humble circumstances and initially considered rough around the edges, Crackers Hot Shot overcame long odds to carve out a career that would forever impact the province’s racing industry. From a “wild, unhandled filly” to Alberta’s “Horse of the Year” in 2013, to producing foals who carry her spirit and fortitude into future generations.

Her influence ripples through Alberta’s racing and breeding landscape: from how young stock are prepared, to the aspirations of local breeders who now look to “the mare that did it” as proof that world-class talent can emerge from Alberta’s paddocks.

“Crackers Hot Shot, she had a tough start. She wasn’t much to look at when we first got her” — Rod Starkewski

“Crackers Hot Shot was left on her own – Carl Archibald heard us talking, he said ‘I’ll go get her – I live by there’. I think it took him 3 days to dig her out of the snow. She was completely wild – then we just started working on her. She really needed some humans to work with her – and get to know that people are not scary.” — Jackie Starkewski

“Crackers Hot Shot would be one of the top broodmares in Albeta percentage wise if nothing else. Her foals hit the track – they’re looking for the winners circle every time.” — Connie Kolthammer

Visit thehorses.com to learn more about Alberta’s Horse Racing industry.