Alberta’s projected deficit could become a modest surplus if oil prices stay above $68 per barrel

Alberta's fiscal position has moved from a projected $9.4-billion deficit to a potential modest surplus of about $5 billion for the 2026-27 fiscal year if oil prices hold near current levels, Cbc reported. The February budget assumed West Texas Intermediate crude would average $60.50 US per barrel.

Prices have instead remained above $70 US per barrel for much of spring and summer and briefly exceeded $100 US per barrel.

Trevor Tombe, an economics professor at the University of Calgary, said the swing represents roughly a $14-billion change in the province's finances in a few months. Resource royalties make up a large share of Alberta government revenue, and the budget showed that every $1 US change in the oil price alters provincial revenues by about $680 million over a full fiscal year.

The United Conservative government announced a $100 affordability rebate for Albertans to offset higher gasoline prices.

Charles St-Arnaud, chief economist for Servus Credit Union, said the improvement is 100 per cent due to higher oil prices. "Yes, the Alberta economy is doing relatively well compared to the rest of the country, but it's not what is driving us to have to swing from a relatively big deficit to a big surplus," he said.

Juliana Rodriguez, press secretary for Finance Minister Jason Nixon, said the province anticipates improvements from the projected deficit.

"However, we have only been in this fiscal year for just over three months, and we cannot base projections for the entire 2026–27 fiscal year on recently elevated oil prices," she said in a statement. The government will update its projections in the next quarterly report at the end of August. Tombe cautioned that volatility remains the main risk.