Q1 Results put Alberta on track for sixth surplus

Posted on September 17, 2026 by Sunny South News

By Patrick Wachter
Southern Alberta Newspapers

The province announced another quarterly surplus in its latest financial update.

The economic update for the province’s 2026 Q1 shows a 2.3 per cent real GDP growth, followed by strength in energy, exports and investment sectors. Impact from international tariffs is noted as limited. The unemployment rate has also fallen to 6.6 per cent in 2026.

High oil prices continue to boost Alberta’s finances, with the 2026-27 first quarter putting the province on track for a $2-billion surplus. With year-end results for 2025-26 also expected to land in surplus, Alberta’s government is on track to report five consecutive surpluses, with a sixth now in sight for 2026-27.

The Alberta Heritage Savings Trust Fund is on track to meet or exceed Budget 2026 forecasts of growing to $32.1 billion by 2026-27 year end, and is thus far tracking to meet Premier Danielle Smith’s goal of growing the fund to $35 billion by the end of 2027. 

“Alberta has been given an opportunity and Alberta’s government will not waste it,” Finance Minister Jason Nixon said. “Alberta’s path forward will be built on our commitment to protect the services Albertans count on, keep spending under control and managing taxpayer dollars with the discipline this moment calls for — so Alberta remains strong not just today, but for generations to come.” 

Higher oil prices driven by global conflicts have turned Alberta’s projected deficit into a surplus of $2 billion.

Despite oil price volatility and geopolitical issues, Alberta’s economy remains resilient, adding more jobs and posting higher average earnings than other provinces in Canada. Non-renewable resource revenue is $9.7 billion higher than forecast at budget.

This increase is mainly due to higher-than-expected oil prices following the U.S.-Israel declaration of war with Iran. Six months ago, the province anticipated West Texas Intermediate — the North American benchmark oil price — would average US$60.50 a barrel in 2026. Two days after introducing the February budget, the U.S.-Iran conflict began, choking off tanker traffic through the Strait of Hormuz. Since April, the province estimates the price of WTI has averaged just above US$88 per barrel. With every dollar increase in the average price, Alberta’s treasury stands to gain $680 million. Personal income tax revenue is up $420 million due to higher-than-expected 2025 tax assessments and an upward revision of personal incomes.

Corporate income tax revenue is up $545 million from budget as a result of stronger corporate profits driven by those higher oil prices. Government transfers are up $346 million from budget due mainly to re-profiling unspent funds from federal agreements in 2025-26 to the current year. Net income from government business enterprises is also up $586 million from budget primarily as the Sturgeon Refinery is forecasting net income compared to a net loss forecast at budget, reflecting strength in commodity prices and higher revenue for the refinery.

Total expense has increased by $315 million, reflecting increases offset by revenue. These increases are not forecast as allocations from the contingency. Operating expense is up $635 million from budget: $357 million for the Alberta Energy Rebate for the quarter beginning on July 1, 2026; $149-million increase for the Aging with Dignity initiative, which supports Alberta’s five-year action plan to enhance seniors care, fully offset by federal revenue. A $127-million revenue increase came from higher costs of selling oil driven by higher crude oil volumes, tariff and trucking costs resulting from higher than forecast royalty volumes.

A $10-million increase was due to re-profiling unspent Sustainable Canadian Agriculture Partnership funding from the prior year, fully offset by federal revenue. The $2-billion surplus is an $11.4-billion difference from the $9.4-billion deficit estimated in Budget 2026.

At this time, none of that surplus cash is forecast to be available for investment in the Alberta Heritage Savings Trust Fund, or for debt repayment. 

“Energy prices can change quickly, trade uncertainty is real and every dollar spent on debt is a dollar taken away from classrooms, hospitals and families,” Nixon said. “We will not commit temporary revenues to permanent expenses.”

As of the first quarter, the government has allocated $106.2 million for disaster and emergency assistance, including $104.7 million for wildfires and $1.5 for tornado damage not covered by insurance or the Hazard Assistance and Resilience Program. Another $480 million from the $2-billion in contingency funding is covering increases in expense not offset by dedicated revenue.

This leaves $1.5 billion unallocated in the contingency to address pressures as required going forward. Taxpayer-supported debt is estimated to be $94.8 billion as of March 31, 2027, down $14.1 billion from budget, due to less borrowing. Total debt servicing costs have decreased $225 million from budget, due to lowerthan-expected borrowing requirements as a result of the improved surplus.

Net debt to GDP is estimated at 7.7 per cent; down from 10.5 per cent from budget. The debt burden in Alberta remains the lowest of all Canadian provinces. The Capital Plan is forecast to have increased by $717 million, mainly due to re-profiling of $532 million in unspent funds from 2025-26 and for additional support.

These increases include: $275 million in capital grants for affordable housing projects, federally funded infrastructure projects, recovery community projects and the Alberta Broadband Strategy; $442 million added to capital investment, including $137 million to accelerate 45 new or modernization school projects under the Schools Now program.