Prior to the release of the state budget on February 27, the Alberta government said it had been “cautious” considering priorities regarding health care, school construction, access to public services and ongoing negotiations for public sector workers. He said that there is a need to make a choice.
With the threat of tariffs looming on President Donald Trump, it remains to be seen how the state’s budget will be affected. For now, the president has suspended his previously announced 25% blanket tariffs on Canadian products, with sculptures on energy products at 10%. However, he has since added tariffs to all steel and aluminum imports, set For it to come into effect on March 12th And he showed that more tariffs could come after his officials considered existing trade agreements by April.
States like Nova Scotia and British Columbia take tariff risk into their budgets. On February 18th, Nova Scotia’s progressive conservative government introduced a major tax cut in 2025–26 bUdget and the reserve fund in case Trump complies with his tariffs. The budget provides investments to diversify the state’s markets and develop resources in areas such as key minerals and wind power.
BC New Democratic Government said in its throne speech on February 18th that it will review its programs and spending to adapt to the changing trading environment. He called the next four years “the most consequential period for our state since World War II,” and vowed to stand up to US tariffs. This follows the February 13 announcement by the NDP government that it will abandon its campaign promise to rebate its $1,000 rebate to residents, citing the need to cut costs amid the threat of tariffs. In particular, US tariffs on BC coniferous wood could reach 50-55% from the current 14%, the state forest minister said.
Jack Mintz, an economist at the University of Calgary’s Department of Public Policy, told the Epoch Times that US tariffs are not prominent in the Alberta budget, and population growth is a bigger factor.
He said tariffs have little impact on Alberta as US refineries rely on state oil.–At least in the short term–And if that comes, a 10% tariff reduction could go to American consumers rather than affecting producers.
He added that oil prices will be another factor affecting the budget.
Population growth
Alberta was Canada’s fastest growing province last fiscal year in 2023.–24, the population has increased by 4.3%. It also recorded the largest net transition from other states and territories that year. Additionally, state estimates last November show that Alberta has received more than 450,000 new residents over the past three years.
“They need to build more schools, and that’s a pressure point because there’s more money they have to put in healthcare,” Mintz said.
Alberta’s budget 2024 forecasts a $367 million surplus, but will need to borrow money to meet immediate spending needs, and $6.6 billion for physician compensation and development programs, three It allocated $3.6 billion to the Department of Health for an annual basis of $26.2 billion. $2 billion per year for nursing homes, drug and supplementary health benefits programs, and $15.5 billion mental health challenges to support recovery programs for those facing addiction.
The Ministry of Education received $9.3 billion in funding in 2024–25 is up 4.4% over the previous year. This includes $1.9 billion over three years to build new schools, more than $1.2 billion over three years to support registered growth and employment of new teachers, for children with vulnerable students and professional learning needs. It includes more than $1.5 billion and roughly $1 billion to fund learning support. For post-secondary programs.
“Alberta is currently facing headwinds from all directions. As cross-border trade issues, unstable oil prices and more people move here to make Alberta home, There is pressure on public services” of the budget release.
Mintz said the population growth would require additional investment in public services, but it represents the state’s greater personal income tax revenue.
At the same time, the state plans to cut personal income taxes in line with Prime Minister Daniel Smith’s election promise, although timing is unknown. The prime minister said last year that the promised cuts must be “responsibly phased out.”
Additionally, Mintz said the government has pledged to expand the Alberta heritage fund, which could include allocating new dollars to the fund. On January 29th, the state announced a long-term plan and a new crown company to increase the fund to $250 billion over the next 25 years to protect Alberta’s economy from “volatility” in the energy sector.
“There’s a lot of pressure there and you have to think about real ideas about how to deal with the spending side of your budget,” Mintz said. “Then you get tariffs, which really adds to all of this.”
Deficits and budget balances
In its second quarter fiscal renewal, released on November 21, 2024, Alberta predicted its budget surplus of $4.6 billion by the end of 2024.–Fiscal year 25 will continue until March 31st. The surplus was “mainly due to increased revenues from personal income taxes and non-renewable resources.”
The state also predicted slightly higher spending in 2024–It’s $2.5,73.3 billion, about $143 million more than the budget. Healthcare was the biggest expense, at $25.5 billion. This was followed by costs from other ministries along with the Legislative Assembly, investments in kindergartens from 12th grade education, investments in higher education, and costs related to seniors, community and social services.
Taxpayer-backed debts are $84 billion by the end of the fiscal year, an estimated $3.8 billion less in the budget, but $2.2 billion from the previous year’s obligations due to additional borrowings required for the maturity of future obligations. It is expected to be a lot, the state said. With a financial update.
Prior to the release of the budget last year, Premier Smith said fuel prices could fall that year and that the state cannot continue to rely on resource revenue to balance budgets with operating risks in the deficit. , demonstrated the need for restraint spending.
“It’s not something that Albertans want to see again and again that they’ve bounced back over the years and then have to choose between having massive debt or cutting down major social programs.” Smith said in a state speech on February 21, 2024.
NDP leader Naheed Nenshi said he is worried about the potential impact of the fiscal deficit, including reductions in services.
“When this government came to power, their first budget warned that instead of taking us off the roller coaster of resources, they actually made us more dependent on oil and gas royalties,” Nenshi said last year. It was mentioned in October.
Tegan Hill, director of Alberta policy at the Fraser Institute, estimates that without “historically high levels of resource revenue” including oil and gas royalties, Alberta will consider a deficit of billions this year. Masu. She told the Epoch Times that the best way for the state to organize its “financial homes” is to curb government spending.
At the address ahead of last year’s budget, Smith said finance minister Horner had directed government spending to limit the legal limit on inflation and population growth. She said, “not only will oil prices be low, as we would expect next year, but oil prices will not only be low even in years when oil and natural gas prices will bring billions of state dollars.” I asked.
