Alberta projects C$5.2-billion budget deficit if Trump tariffs proceed

Alberta, Canada's oil producing province, forecasted a deficit of C$5.2billion ($3.5billion) for fiscal 2025/26 if U.S. Tariffs were implemented. This would result in a decrease of government revenues as well as slowed economic growth.

The outlook shows a drastic reversal in Alberta's financial health following what was expected to be a C$5,8-billion surplus for the current fiscal period. It also illustrates the widespread uncertainty Canadian policymakers face as they deal with the tariff situation.

How can you plan a budget with so many unknowns? What will the U.S. President say or not say over the next few days, weeks, and months? Nate Horner, Alberta's finance minister, told reporters.

The province's revenue forecast for 2025-2026 was C$74 billion. This is C$6.6 billion less than the C$81 billion third quarter forecast in 2024-25, due largely to lower oil prices and royalty payments.

After growing by an estimated 3% in the past year, it said that its Gross Domestic Products growth will slow to 1,8% in 2025 and to 1,7% in 2026.

Alberta also said that it forecasts deficits of C$2.4bn and C$2.0bn for fiscal years 2026/27/2027/28.

Alberta's annual budget document reflects its expectations of a "moderate" U.S. - Canada trade conflict, which could include tariffs and retaliatory actions.

Horner explained that Alberta's budget was based on the analysis that a tariff of 25% would not be sustainable for the U.S. Economy. Instead, the province is looking at a 15% tariff average for the year for most goods, and 10% for oil.

He said that Alberta does not know what Trump will do, beyond what he has publicly said. The province makes its "best and reasonable guess" as to what it faces. (Reporting and editing by Caroline Stauffer; Amanda Stephenson)

(source: Reuters)