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Falling oil prices and trade troubles continue to threaten Alberta’s finances, but the province’s deficit is expected to shrink only slightly.
It has been pegged at $6.4 billion, down $40 million from a projected $6.5 billion this summer.
The latest update still means this year’s budget represents a massive multibillion-dollar swing from an $8.3-billion surplus last year.
The biggest factor is a 30 per cent decline in natural resource revenue since last year.
While February’s budget projected the price of West Texas Intermediate oil — the North American benchmark — to be US$68 a barrel, the province now predicts it will average US$61.50 per barrel.
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Finance Minister Nate Horner says it has been a tough year for everyone, and the province remains focused on controlling spending.
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“No matter the fiscal challenges, we will continue investing in families and the services they rely on,” he said in a statement Thursday.
Alberta is reporting record high oil sands production, but global trends are “expected to keep a lid on demand and prices” for the rest of the fiscal year, budget documents say.
The province has estimated that every dollar drop in the per-barrel WTI price slashes $750 million from Alberta’s treasury.
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At the same time, ongoing trade wars with China and the United States continue to weigh down the province’s agriculture, manufacturing and lumber exports.
Alberta’s recent rapid population growth is expected to steady. But the province is still under added pressure, having topped a population of five million people earlier this year.
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Recent labour agreements with large public sector unions, including those representing teachers, registered nurses and civil servants, mean the province needs to dip into its contingency fund to the tune of about $881 million.
Of the $4 billion set aside for emergencies, $1.7 billion has been spent.
Underpinning the fiscal picture is overall spending of $79 billion, a small increase from February’s budget but a jump of $5.3 billion from what Alberta spent last year.
Total revenue for 2025 is set to be $73 billion — a drop of $1.2 billion from the budget earlier this year.
Taxpayer-supported debt is expected to be $82.9 billion by March, an increase from $82.5 billion, due to the deficit.
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