Budget 2026–27 marks a significant political pivot for the Smith government. Faced with declining resource revenues and the cost pressures of rapid population growth, the government has made a clear choice: avoid raising taxes, increase fiscal deficits, and protect the public services that voters depend on. With a provincial election in 2027, the Smith government has decided that defending core service levels is a better political position than enforcing fiscal sustainability.
Total spending rises to $83.9 billion, resulting in a $9.4 billion deficit in 2026–27. The 2023 Fiscal Responsibility Act, which requires a return to balance within three years of a deficit, has been set aside.
Total revenue is forecast at $74.6 billion, down year over year, driven primarily by a $3.1 billion reduction in non-renewable resource revenue. With resource revenues under pressure, the budget turns to property tax increases and targeted levies. The education property tax requisition rises 16%, translating to approximately $28 more per month for a median Calgary homeowner. More than 30 new fees and levies are also introduced.
Significant spending increases are focused on health care ($34.4 billion, up $1.9 billion), education ($10.8 billion, up 7.2%), and a three-year capital plan totaling $28.3 billion. Population growth is the unifying thread, with infrastructure spending needed to accommodate 84,000 new Albertans who arrived last year alone.
Taxpayer-supported debt climbs to $108.9 billion, with annual debt servicing costs reaching $3.4 billion. The budget quietly acknowledges that the current fiscal approach is constraining the ability to respond to mounting pressures.
The 2026–27 budget makes a deliberate political bet that Albertans will reward a government that protected services and kept taxes low during a period of fiscal stress. The long-term test will be whether Alberta can convert population growth into sustainable revenue growth and restore firm fiscal guardrails once conditions improve.