# EDGAR Filing Document

**Accession Number:** 0000810961
**File Stem:** 0001193125-25-195714
**Filing Date:** 2025-9
**Character Count:** 95853
**Document Hash:** a3c01991dfa06dc30c46081d9335e9d6
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-25-195714.hdr.sgml**: 20250904

**ACCESSION NUMBER**: 0001193125-25-195714

**CONFORMED SUBMISSION TYPE**: 18-K/A

**PUBLIC DOCUMENT COUNT**: 11

**CONFORMED PERIOD OF REPORT**: 20250331

**FILED AS OF DATE**: 20250904

**DATE AS OF CHANGE**: 20250904

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PROVINCE OF ALBERTA
- **CENTRAL INDEX KEY:** 0000810961
- **STANDARD INDUSTRIAL CLASSIFICATION:** FOREIGN GOVERNMENTS [8888]
- **ORGANIZATION NAME:** International Corp Fin
- **FISCAL YEAR END:** 0331

**FILING VALUES:**
- **FORM TYPE:** 18-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 033-12133
- **FILM NUMBER:** 251292424

**BUSINESS ADDRESS:**
- **STREET 1:** 767 5TH AVE 27TH FL
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10153

## UNITED STATES

## SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549** 

## FORM 18-K/A
**For Foreign Governments and Political Subdivisions Thereof** 

**AMENDMENT NO. 1 TO** 

## ANNUAL REPORT
**of** 

## PROVINCE OF ALBERTA
**CANADA** 

**(Name of Registrant)** 

**Date of end of last fiscal year: March 31, 2025** 

## SECURITIES REGISTERED\*
**(As of close of fiscal year)** 

---

| | | |
|:---|:---|:---|
| Title of Issue | Amounts as to<br>which registration<br>is effective | Names of<br> exchanges on<br> which registered |
| N/A | N/A | N/A |

---

Names and addresses of persons authorized to receive notices

and communications from the Securities and Exchange Commission:

NATHAN COOPER

Alberta's Senior Representative to the United States of America

Alberta Washington Office

Canadian Embassy

501 Pennsylvania Avenue N.W.

Washington, D.C. 20001

Phone: 202-448-6475

*Copies to:* 

---

| | |
|:---|:---|
| STEPHEN J. THOMPSON<br> Assistant Deputy Minister,<br> Treasury and Risk Management<br> Treasury Board and Finance<br> 8th fl Federal Building, 9820 — 107 Street<br> Edmonton, Alberta T5K 1E7<br> (780) 644-5011 | CHRISTOPHER J. CUMMINGS<br> Paul, Weiss, Rifkind, Wharton & Garrison LLP<br> Toronto-Dominion Centre<br> 77 King Street West, Suite 3100<br> Toronto, ON Canada M5K 1J3<br> (416) 504-0520 |

---

*\*The Registrant is filing this annual report on a voluntary basis.* 

------

**PROVINCE OF ALBERTA** 

The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report (the "Annual Report") for the fiscal year ended March 31, 2025 on Form 18-K as set forth below:

The following additional exhibits are added to the Annual Report:

*99.5* *2025-26 First Quarter Fiscal Update and Economic Statement.* 

------

**SIGNATURE** 

Pursuant to the requirements of the Securities Exchange Act of 1934*,* the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, at Edmonton, Alberta, Canada on the 4th day of September, 2025.

---

| | |
|:---|:---|
| Province of Alberta | Province of Alberta |
| By: | /s/ Stephen J. Thompson |
| Name: | Stephen J. Thompson |
| Title: | Assistant Deputy Minister,<br> Treasury and Risk Management,<br> Treasury Board and Finance |

---

------

---

| | |
|:---|:---|
| **EXHIBIT INDEX** | **EXHIBIT INDEX** |
| **Exhibit Number** | **Description** |
| 99.5 | 2025-26 First Quarter Fiscal Update and Economic Statement. |

---

## Exhibit 99.5

**Exhibit 99.5** 

GOVERNMENT OF ALBERTA

## 2025-26 First Quarter

## Fiscal Update and

## Economic Statement
![LOGO](g874552dsp05.gif)

------

**Table of Contents**

---

| | |
|:---|:---|
|  **2025-26 First Quarter Fiscal Plan Highlights** | **1** |
|  **Revenue Highlights** | **3** |
|  **Expense Highlights** | **5** |
|  **Assets and Liabilities** | **7** |
|  **Fiscal Framework** | **8** |
|  **Capital Plan Highlights** | **9** |
|  ***Local Government Fiscal Framework Act* Report** | **10** |
|  **2025-26 First Quarter Fiscal Update Tables** | **11** |
|  **Fiscal Update and Economic Statement** | **15** |
|  **Economic Update** | **16** |
|  **Key Energy and Economic Assumptions** | **21** |

---

Note: Amounts presented in tables may not add to totals due to rounding.

Note on restatements and accounting policy changes:

• 2025-26 Budget numbers have been restated to reflect the SafeRoads
Alberta program transfer from Transportation and Economic Corridors to Justice, Internal Trade unit transfer from Executive Council to Jobs, Economy, Trade and Immigration.

• Effective April 1, 2025, Health asset ownership has been transferred from health entities to Infrastructure
under the *Real Property Governance Act* resulting in the variance from 2024-25 Actual to 2025-26 Budget and Forecast numbers in Hospital and Surgical Health
Services and Infrastructure.

• 2024-25 Actual and 2025-26 Budget
numbers have been restated to reflect the revised government structure under the *Government Organization Act* (Orders in Council 147/2025, 148/2025, 149/2025, and 150/2025, May 16, 2025, Order in Council 087/2025, April 29, 2025,
Order in Council 384/2024, December 12, 2024, and Ministerial Order 803/2024, August 28, 2024), and through amendments to *Alberta's Provincial Health Act* (Ministerial Orders 701/2024 and 703/2024, June 21, 2024, and
Ministerial Orders 330/2024 and 331/2024, November 12, 2024).

Treasury Board and Finance, Government of Alberta

August, 2025

2025–26 First Quarter Fiscal Update and Economic Statement

Additional copies of this report may be obtained by visiting our website at:

<u>www.alberta.ca/budget-documents.aspx</u>

------

2025-26 First Quarter Fiscal Plan Highlights

The 2025-26 first quarter update includes a $6.5 billion deficit, $1.3 billion more than estimated in *Budget 2025* mainly as a result of lower-than-expected non-renewable resource (NRR) revenue, which peaked in 2022-23. While Alberta's economy has been resilient so far this year, a significant shift in U.S. trade policy has dampened prospects for the global economy which is weighing on oil prices. Uncertainty with U.S. trade policy and its impact on the Alberta economy and government revenues remain significant risks to the outlook.

The 2025-26 revenue forecast is lower by $1.2 billion, mainly driven by a decline in NRR. Total program expense has increased by $0.1 billion from budget due to expense increases offset by dedicated revenue. Other expense increases of $1.5 billion are forecast to be absorbed by the contingency in alignment with the *Sustainable Fiscal Planning and Reporting Act.* 

**Total revenue** of $73 billion is forecast, $1.2 billion lower than estimated in *Budget 2025.* NRR revenue is down $1.4 billion from budget. The revenue decline is mainly due to lower crude oil prices and a stronger Canadian dollar, partially offset by a narrower light-heavy differential. Income tax revenue is down $0.3 billion from budget, mainly due to lower-than-expected 2024 personal income tax assessments, offset by a $0.5 billion increase in investment income reflecting the rebound in the equity market.

**Total expense** of $79.4 billion is forecast, an increase of $0.1 billion from budget, while expense before forecast contingency allocations is $1.6 billion higher. Operating expense is up by $0.7 billion mainly related to collective bargaining for the ratified agreements with United Nurses of Alberta, Professional Association of Resident Physicians of Alberta, and oncologists, and to support collective bargaining for

teachers. Capital grant increases of $0.1 billion are mainly from re-profiling of projects from 2024-25. Debt servicing costs have slightly increased due to higher-than-expected borrowing requirements as a result of the higher deficit. Disaster and emergency assistance, primarily for wildfire fighting, is $0.7 billion.

**The Capital Plan** in 2025-26 is forecast at $8.9 billion, $0.3 billion more than budget, largely from re-profiling unspent capital project funding to the current year from 2024-25. Capital grants have increased by $0.1 billion and capital investment has increased $0.2 billion.

**Taxpayer-supported debt** is forecast at $84.3 billion as at March 31, 2026, a decrease of $0.9 billion from 2025, as a result of pre-funded debt maturities being paid off and an increase of $1.7 billion from budget due to the higher deficit. Net debt to GDP at year-end is forecast to be 8.7 per cent.

**Fiscal Plan Summary** 

(millions of dollars)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Change**<br> **from**<br> **Budget** |
|  | | **2025-26** | **2025-26** | **Change**<br> **from**<br> **Budget** |
|  | **2024-25**<br>**Actual** | **Budget** | **Forecast** | **Change**<br> **from**<br> **Budget** |
|  **Revenue** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Tax revenue | 30356 | **28837** | **28489** | (349) |
| &nbsp;&nbsp;&nbsp;&nbsp; Non-renewable resource revenue | 21986 | **17067** | **15656** | (1411) |
| &nbsp;&nbsp;&nbsp;&nbsp; Federal transfers | 12618 | **13287** | **13413** | 125 |
| &nbsp;&nbsp;&nbsp;&nbsp; Investment income | 4803 | **2882** | **3389** | 507 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other revenue | 12706 | **12064** | **12020** | (44) |
|  **Total Revenue** | **82469** | **74138** | **72967** | **(1171)** |
|  **Expense** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating expense | 62025 | 64311 | **64989** | 679 |
| &nbsp;&nbsp;&nbsp;&nbsp; Capital grants | 2934 | 3452 | **3584** | 132 |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization / inventory consumption / loss on disposals | 4446 | 4993 | **4993** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Debt servicing costs | 3215 | 2968 | **3004** | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp; Pension provisions | (403) | (375) | **(375)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Disaster and emergency assistance | 1932 | - | **706** | 706 |
|  **Expense before contingency** | **74149** | **75349** | **76902** | **1554** |
| &nbsp;&nbsp;&nbsp;&nbsp; Contingency (forecast un-allocated) | - | 4000 | **2542** | (1458) |
|  **Total Expense** | **74149** | **79349** | **79444** | **95** |
|  **Surplus / (Deficit)** | **8320** | **(5211)** | **(6477)** | **(1267)** |
|  **Capital Plan** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Capital grants | 2934 | 3452 | **3584** | 132 |
| &nbsp;&nbsp;&nbsp;&nbsp; Capital investment | 4309 | 5187 | **5348** | 162 |
|  **Total Capital Plan** | **7243** | **8639** | **8933** | **294** |

---

**2025–26 First Quarter \|** Fiscal Update and Economic Statement<sub>1</sub>

------

**Revenue** 

(millions of dollars)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | |
|  | | **2025-26** | **2025-26** | |
| | **2024-25**<br>**Actual** | **Budget** | **Forecast** | **Change**<br>**from**<br> **Budget** |
|  **Income Taxes** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Personal income tax | 16120 | 15510 | **14937** | (573) |
| &nbsp;&nbsp;&nbsp;&nbsp; Corporate income tax | 8125 | 6764 | **7000** | 236 |
|  | **24245** | **22274** | **21937** | **(337)** |
|  **Other Taxes** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Education property tax | 2797 | 3124 | **3124** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Fuel tax / electric vehicle tax | 1431 | 1438 | **1409** | (30) |
| &nbsp;&nbsp;&nbsp;&nbsp; Tobacco / vaping tax | 414 | 420 | **401** | (19) |
| &nbsp;&nbsp;&nbsp;&nbsp; Insurance taxes | 914 | 972 | **980** | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cannabis tax | 232 | 215 | **231** | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp; Tourism levy | 126 | 122 | **128** | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other taxes | 197 | 272 | **279** | 7 |
|  | **6111** | **6563** | **6552** | **(12)** |
|  **Non-Renewable Resource Revenue** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Bitumen royalty | 17167 | 12830 | **11924** | (906) |
| &nbsp;&nbsp;&nbsp;&nbsp; Crude oil royalty | 3037 | 2510 | **2302** | (207) |
| &nbsp;&nbsp;&nbsp;&nbsp; Natural gas and by-products royalty | 1220 | 1228 | **924** | (304) |
| &nbsp;&nbsp;&nbsp;&nbsp; Bonuses and sales of Crown leases | 385 | 361 | **360** | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp; Rentals and fees / coal royalty | 178 | 138 | **145** | 7 |
|  | **21986** | **17067** | **15656** | **(1411)** |
|  **Transfers from Government of Canada** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Canada Health Transfer | 6161 | 6560 | **6560** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Canada Social Transfer | 1993 | 2089 | **2089** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Direct transfers to SUCH sector / Alberta Innovates Corp. | 676 | 693 | **701** | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp; Infrastructure support | 767 | 807 | **836** | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp; Agriculture support programs | 507 | 552 | **555** | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp; Labour market agreements | 252 | 257 | **253** | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp; Early learning child care agreements | 1208 | 1147 | **1147** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other federal transfers | 1055 | 1182 | **1272** | 90 |
|  | **12618** | **13287** | **13413** | **125** |
|  **Investment Income** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Alberta Heritage Savings Trust Fund | 2053 | 1129 | **1516** | 387 |
| &nbsp;&nbsp;&nbsp;&nbsp; Endowment funds | 517 | 261 | **431** | 171 |
| &nbsp;&nbsp;&nbsp;&nbsp; Income from local authority loans | 671 | 577 | **536** | (41) |
| &nbsp;&nbsp;&nbsp;&nbsp; Agriculture Financial Services Corporation | 107 | 149 | **149** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other (includes SUCH sector) | 1454 | 767 | **757** | (11) |
|  | **4803** | **2882** | **3389** | **507** |
|  **Net Income from Government Business Enterprises** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; AGLC – Gaming / lottery | 1486 | 1540 | **1535** | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp; AGLC – Liquor | 770 | 783 | **787** | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp; AGLC – Cannabis | 7 | 9 | **10** | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp; ATB Financial | 348 | 285 | **285** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Balancing Pool | 50 | 57 | **63** | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other (CUDGCo / APMC / PSIs) | (608) | (659) | **(700)** | (41) |
|  | **2053** | **2016** | **1980** | **(36)** |
|  **Premiums, Fees and Licences** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Post-secondary institution tuition fees | 2058 | 2133 | **2133** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Health / school board fees and charges | 872 | 912 | **915** | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp; Motor vehicle licences | 603 | 634 | **634** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Crop, hail and livestock insurance premiums | 639 | 674 | **674** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Energy industry levies | 409 | 429 | **429** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other (includes land titles revenue) | 923 | 854 | **853** | (1) |
|  | **5504** | **5636** | **5638** | **2** |
|  **Other** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; SUCH sector sales, rentals and services | 1144 | 1277 | **1286** | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp; SUCH sector fundraising, donations, gifts, contributions | 828 | 821 | **824** | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp; AIMCo investment management charges | 918 | 988 | **988** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Fines and penalties | 222 | 186 | **186** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Refunds of expense | 423 | 171 | **174** | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp; Technology Innovation and Emissions Reduction Fund | 172 | 409 | **391** | (18) |
| &nbsp;&nbsp;&nbsp;&nbsp; Miscellaneous | 1443 | 560 | **553** | (7) |
|  | **5149** | **4412** | **4402** | **(10)** |
|  **Total Revenue** | **82469** | **74138** | **72967** | **(1171)** |

---

---

| | |
|:---|:---|
| **2** | **2025–26 First Quarter \|** Fiscal Update and Economic Statement |

---

------

Revenue Highlights

**Total Revenue** of $73 billion is forecast for 2025-26, $1.2 billion lower than estimated in *Budget 2025*, mainly due to a projected decline in NRR revenue and lower personal income taxes, partially offset by increases in federal transfers, investment income, and premiums, fees and licences.

• **Resource revenue** is forecast to be $15.7 billion in 2025-26, $1.4 billion lower than budget. The decrease from budget is primarily
driven by lower bitumen royalties, with notable reductions in conventional oil, natural gas and by-products royalties as well.

• The West Texas Intermediate (WTI) oil price is forecast to average US$63.75 per barrel (/bbl) in 2025-26, $4.25/bbl lower than budget due to ongoing global trade policy
uncertainties following the April 2025 U.S. tariffs announcements, and OPEC+'s decision to accelerate its production growth. The light-heavy differential is expected to average US$11.90/ bbl for 2025-26, $5.20/bbl narrower than budgeted. This reflects strong demand for heavy crude, supported by higher U.S. refinery utilization, and reduced heavy crude supply due to extensive oil sands maintenance and declining exports from Mexico. Expanded access to
international markets through TMX has also contributed to the tighter spread.

• The US-Canadian dollar exchange rate is forecast to average 72.5 US¢/Cdn$ for the fiscal year, above the budget of 69.6 US¢/Cdn$. A higher Canadian dollar results in
lower oil prices when they are converted from US to Canadian dollars, negatively impacting Alberta government revenue.

• Bitumen royalties of $11.9 billion are forecast, $0.9 billion lower than budget, mainly due to the weaker WTI prices and a stronger Canadian dollar, which is partially offset by a narrower light-heavy
differential. The anticipated oil sands project payout

profile is contributing to increased bitumen royalties. Three projects are expected to reach payout in 2025, consistent with *Budget 2025* and one of the three projects has already reached payout.

• Crude oil royalties are forecast at $2.3 billion, a $207 million decrease from budget, driven by the same factors as bitumen royalties.

• Natural gas and by-product royalties are forecast at $0.9 billion, $304 million lower than estimated in budget. This decrease reflects lower natural gas prices and
weaker natural gas liquids (NGL) prices. The decline in natural gas prices is largely driven by oversupplied market conditions in Western Canada, reflecting a slower-than-expected ramp-up of the newly
constructed LNG Canada facility, ongoing regional pipeline export bottlenecks and high storage levels. The weaker NGLs prices are driven primarily by low crude oil prices as NGLs pricing trends with oil prices. The Alberta Reference Price is
forecast at Cdn$2.20 per gigajoule (/GJ), a decrease of $0.40/GJ from budget.

• **Personal income tax** (PIT) revenue is forecast at $14.9 billion, a decrease of $573 million from budget, mainly due to lower-than-expected 2024 tax assessments.

• **Corporate income tax** (CIT) revenue is forecast at $7 billion, up by $236 million from *Budget 2025* driven by upward revision to corporate profits.

• **Other tax revenue** is forecast at $6.6 billion, a $12 million decline from budget, due to lower tobacco and fuel tax revenue, partially offset by higher cannabis tax revenue
and the other taxes.

• **Federal transfers** of $13.4 billion are forecast, $125 million higher than estimated in budget. The increase is mostly attributed to $25 million increase for the
National School Food Program, $54 million for the carry

forward of the Federal Aging with Dignity, and carry-over of unspent Investing in Canada Infrastructure Program (ICIP) funds from 2024-25 and various other minor federal transfers.

• **Total revenue from other sources** is forecast at $15.4 billion, $463 million higher than budget.

Investment income is up $507 million. Heritage Fund and Endowments increased investment income since the forecast improved due to strength in equity markets. This increase was offset by lower interest income from loans. <br>

Net income from government business enterprises is $36 million below budget primarily due to a higher operating loss at the Alberta Petroleum Marketing Commission. <br>

Premiums, fees and licences is forecast $2 million higher primarily for the Rangeland Sustainability Program. <br>

Other revenue is forecast a net $10 million lower, mainly from an $18 million reduction in Technology Innovation and Emissions Reduction Fund (TIER) partially offset by $8 million mostly in capital carry-over for the Appeal Commission Case Management Solution, and to support reforms to the *Civil Forfeiture Act*, including modernization efforts. <br>

**2025–26 First Quarter \|** Fiscal Update and Economic Statement<sub>3</sub>

------

**Operating Expense by Ministry** 

(millions of dollars)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | |
|  | | **2025-26** | **2025-26** | |
| | **2024-25**<br>**Actual** | **Budget** | **Forecast** | **Change**<br>**from**<br> **Budget** |
|  Advanced Education | 6607 | 6635 | **6635** |  |
|  Affordability and Utilities | 125 | 160 | **160** |  |
|  Agriculture and Irrigation | 833 | 860 | **863** | 4 |
|  Arts, Culture and Status of Women | 140 | 157 | **158** | 1 |
|  Assisted Living and Social Services | 9209 | 10025 | **10130** | 105 |
|  Children and Family Services | 1515 | 1595 | **1595** |  |
|  Education and Childcare | 10839 | 11832 | **12097** | 265 |
|  Energy and Minerals | 1223 | 892 | **829** | (64) |
|  Environment and Protected Areas | 401 | 514 | **505** | (10) |
|  Executive Council | 94 | 105 | **105** |  |
|  Forestry and Parks | 352 | 362 | **364** | 1 |
|  Hospital and Surgical Health Services | 13064 | 13137 | **13447** | 311 |
|  Indigenous Relations | 222 | 228 | **229** | 1 |
|  Infrastructure | 467 | 491 | **491** |  |
|  Jobs, Economy, Trade and Immigration | 345 | 397 | **403** | 6 |
|  Justice | 683 | 700 | **703** | 2 |
|  Mental Health and Addiction | 1597 | 1663 | **1697** | 34 |
|  Municipal Affairs | 228 | 258 | **258** |  |
|  Primary and Preventative Health Services | 8934 | 8950 | **8961** | 11 |
|  Public Safety and Emergency Services | 1259 | 1312 | **1316** | 4 |
|  Service Alberta and Red Tape Reduction | 177 | 180 | **182** | 2 |
|  Technology and Innovation | 775 | 834 | **834** |  |
|  Tourism and Sport | 124 | 118 | **118** |  |
|  Transportation and Economic Corridors | 576 | 580 | **580** | 1 |
|  Treasury Board and Finance | 2090 | 2164 | **2164** |  |
|  Legislative Assembly | 144 | 161 | **164** | 3 |
|  **Total Operating Expense** | **62025** | **64311** | **64989** | **679** |

---

---

| | |
|:---|:---|
| **4** | **2025–26 First Quarter \|** Fiscal Update and Economic Statement |

---

------

Expense Highlights

**Total Expense** of $79.4 billion is forecast, a $0.1 billion increase from budget, reflecting $95 million in expenses offset by dedicated revenue.

• **Operating expense** is forecast at $65 billion, $679 million more than *Budget 2025.* This increase is primarily due to:

$647 million increase for collective bargaining pressures across various ministries, primarily Assisted Living and Social Services, Education and Childcare, Hospital and Surgical Health Services, Primary and Preventative Health Services and Mental Health and Addiction for the ratified agreements with United Nurses of Alberta, Professional Association of Resident Physicians of Alberta, and oncologists, and to support collective bargaining for teachers. <br>

$54 million increase for federally funded Aging with Dignity initiative which supports Alberta's five-year action plan to enhance seniors' care. <br>

$25 million increase for the National School Food Program to provide meals to Canadian children beyond the existing school fund programs. <br>

$6 million increase to create a centre of excellence for aviation training through the Aerospace Innovation and Training and Aerospace Workforce Development grants. <br>

$4 million increase to re-profile unspent Sustainable Canadian Agriculture Partnership funding from the prior year, fully offset by federal revenue. <br>

$4 million increase in various minor programs such as the Rangeland Sustainability Program and supporting regional water and wastewater systems in Alberta. <br>

$3 million increase for Gender-Based Violence initiatives including financial support for Albertans to navigate the justice system and to support a province-wide public awareness campaign, fully offset by federal revenue. <br>

$3 million increase from consolidating the Civil Forfeiture Fund to enhance accountability of the program. <br>

$2 million increase for the Gang Violence Action Fund, offset by federal funding. <br>

$2 million increase in the First Nations Development Fund to support economic, social and community development projects, fully offset by revenue. <br>

$2 million increase to support the Horse Racing and Breeding Program renewal, which is fully offset by dedicated revenue. <br>

These increases are partially offset by $64 million due to lower costs for selling oil, driven by decreased royalty volumes, and forecasted purchases by the Alberta Petroleum Marketing Commission (APMC). Additionally, a $9 million decrease reflects reduced funding for Innovation and Technology investments resulting from freezing the TIER Fund credit price at $95 per tonne of emissions. <br>

• **Capital grants** of $3.6 billion are forecast, up $132 million from budget, primarily from re-profiling 2024-25 recovery community, affordable housing and federally funded infrastructure projects and $21 million in new funding towards a centre of excellence for aviation training.

• **Debt servicing costs** are forecast to increase $37 million from budget, due mainly to higher borrowing requirements. This is offset by a

decrease in debt servicing costs for loans to local authorities, which is fully offset by investment income revenue.

• **Disaster and emergency assistance** of $706 million is forecast, primarily due to an active wildfire season. This includes $700 million for wildfire presuppression and
response, and $6 million for the Wildfire Reclamation Program to replant previously reforested areas that have been affected by wildfires during the 2025 wildfire season.

• **A contingency** of $4 billion was included in *Budget 2025*, to align with the in-year expense limitation under the legislated fiscal
framework. Increases in expense not offset by dedicated revenue are included in the preliminary contingency allocation. $1.5 billion in expense increases are forecast as the preliminary allocation from the budgeted contingency. The government
continues to monitor the impact of the U.S. tariffs and other factors. The $2.5 billion remaining in contingency is available to address impacts as required.

**Preliminary Contingency Allocation** 

(millions of dollars)

---

| | |
|:---|:---|
|  **Budget 2025-26** | **4000** |
| less expense changes net of dedicated revenue: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Op. ex., cap. grants, debt servicing costs | (752) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Emergency / disaster assistance | (706) |
|  **Unallocated contingency** | **2542** |

---

**2025–26 First Quarter \|** Fiscal Update and Economic Statement<sub>5</sub>

------

**Balance Sheet Summary** 

(millions of dollars)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **At March 31** | **At March 31** | **At March 31** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Change** <br> **from** <br> **2025**  |
|  | | **2026** | **2026** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Change** <br> **from** <br> **2025**  |
|  | **2025**<br>**Actual** | **Budget <sup>a</sup>** | **Forecast** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Change** <br> **from** <br> **2025**  |
|  **Financial Assets** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Alberta Heritage Savings Trust Fund accumulated operating surplus | 24743 | 25731 | 27205 | 2462 |
| &nbsp;&nbsp;&nbsp;&nbsp; Endowment fund accumulated operating surpluses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alberta Heritage Foundation for Medical Research | 2370 | 2470 | 2493 | 123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alberta Heritage Science and Engineering Research | 1374 | 1430 | 1461 | 87 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alberta Heritage Scholarship | 1539 | 1605 | 1636 | 97 |
| &nbsp;&nbsp;&nbsp;&nbsp; Alberta Enterprise Corporation | 323 | 319 | 319 | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp; General Revenue Fund - surplus cash | 2571 |  |  | (2571) |
| &nbsp;&nbsp;&nbsp;&nbsp; General Revenue Fund - debt retirement | 9952 | 2945 |  | (9952) |
| &nbsp;&nbsp;&nbsp;&nbsp; Alberta Fund | 2571 |  |  | (2571) |
| &nbsp;&nbsp;&nbsp;&nbsp; Self-supporting lending organizations / activities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Local authority loans | 13823 | 14574 | 15390 | 1567 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Agriculture Financial Services Corporation | 2920 | 3973 | 3994 | 1074 |
| &nbsp;&nbsp;&nbsp;&nbsp; Equity in commercial enterprises: ATB / AGLC / APMC / CUDGCo / Bal. Pool / PSIs | 735 | 700 | 418 | (317) |
| &nbsp;&nbsp;&nbsp;&nbsp; Student loans | 4936 | 5253 | 5253 | 317 |
| &nbsp;&nbsp;&nbsp;&nbsp; Technology Innovation and Emissions Reduction Fund | 1106 | 1106 | 1179 | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other financial assets (including SUCH sector / Alberta Innovates Corp.) | 28972 | 31157 | 25834 | (3138) |
|  **Total Financial Assets** | **97935** | **91263** | **85181** | **(12754)** |
|  **Liabilities** |  |  |  |  |
|  <u>Taxpayer-supported debt:</u> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Direct borrowing for the Capital Plan | 48045 | 45461 | 47232 | (813) |
| &nbsp;&nbsp;&nbsp;&nbsp; Alternative Financing (Public-private partnerships (P3s) - Capital Plan) | 2515 | 2412 | 2412 | (103) |
| &nbsp;&nbsp;&nbsp;&nbsp; Debt issued to reduce pre-1992 Teachers' Pension Plan unfunded liability | 451 | 451 | 451 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Direct borrowing for the Fiscal Plan | 34214 | 34215 | 34215 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total taxpayer-supported debt  | 85225 | 82539 | 84310 | (915) |
|  <u>Self-supporting lending organization / activity debt:</u> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Debt issued to finance local authority loans | 13823 | 14574 | 15390 | 1567 |
| &nbsp;&nbsp;&nbsp;&nbsp; Agriculture Financial Services Corporation | 3434 | 3651 | 3622 | 188 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total taxpayer and self-supported debt  | 102482 | 100764 | 103322 | 840 |
| &nbsp;&nbsp;&nbsp;&nbsp; Coal phase-out liabilities | 514 | 432 | 432 | (82) |
| &nbsp;&nbsp;&nbsp;&nbsp; Pension liabilities | 7504 | 7129 | 7129 | (375) |
| &nbsp;&nbsp;&nbsp;&nbsp; Asset retirement obligations | 2579 | 2591 | 2591 | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other liabilities (includes SUCH sector / Alberta Innovates Corp.) | 19193 | 21159 | 13864 | (5329) |
|  **Total Liabilities** | **132272** | **132074** | **127338** | **(4934)** |
|  **Net Financial Assets / (Debt)** | **(34337)** | **(40811)** | **(42157)** | **(7820)** |
| **Capital / other non-financial assets** | 62925 | 64135 | 64297 | 1372 |
| &nbsp;&nbsp;&nbsp;&nbsp; Spent deferred capital contributions | (4080) | (4027) | (4109) | (29) |
|  **Net Assets** | **24508** | **19297** | **18031** | **(6477)** |
| &nbsp;&nbsp;&nbsp;&nbsp; Net assets / (liabilities) - statement of operations | 20966 | 15755 | 14489 | **(6477)** |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated remeasurement gains | 3542 | 3542 | 3542 | - |
|  **Change in Net Assets - statement of operations (before adjustments)** | **8317** | **(5211)** | **(6477)** | **(14794)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net financial debt / GDP (calendar year, nominal)** | **-7.2%** | **-8.5%** | **-8.7%** |  |

---

<sup>a</sup> Budget numbers have been restated to reflect 2024-25 Actual results.

---

| | |
|:---|:---|
| **6** | **2025–26 First Quarter \|** Fiscal Update and Economic Statement |

---

------

Assets and Liabilities

**Financial Assets** of $85.2 billion are forecast as at March 31, 2026, a decrease of $12.8 billion from March 31, 2025.

• Heritage, endowment funds, and the Alberta Enterprise Corporation (AEC) accumulated surpluses are forecast to grow $2.8 billion. Net income of the Alberta Heritage Savings Trust Fund (Heritage Fund) is fully
retained in the fund, while the net assets of the three endowment funds and AEC have increased a net $302 million, mainly due to increased income.

• At March 31, 2026, there is no surplus cash forecast to be available for allocation. In 2024-25, the government identified $5.1 billion of surplus cash. In July 2025,
the government directed $2.8 billion of this cash to the Heritage Fund. The remaining $2.3 billion in surplus cash related to 2024-25 is to be allocated to offset additional, new borrowing
requirements in 2025-26 as a result of the deficit.

• In order to manage debt maturities coming due in early 2025-26, the government borrowed in advance to achieve efficiencies and the lowest cost possible in repaying the maturing
bonds. The funds raised in advance were held in a designated debt retirement account. At March 31, 2026, as a result of these large maturities being repaid, the debt retirement account is forecast to hold no balance, a decrease of
$10 billion from the prior year *.* 

• Financial assets from self-supported lending activity and Agriculture Financial Services Corporation (AFSC) are increasing $2.6 billion, partially as a result of an increase in loans to local authorities.

• Commercial enterprise equity is a net of $317 million lower than at March 31, 2025. The change is due mainly to a forecast operating loss at APMC's Sturgeon Refinery, partially offset by positive net
income from ATB Financial and other enterprises.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

• Other financial assets are forecast to be $2.7 billion less than March 31, 2025. These include financial assets of school boards, universities and colleges, and the health authority, student loans, accounts
and interest receivable, natural gas royalty deposits, cash associated with future liabilities such as corporate income tax refunds, the cash reserve, and derivative financial instruments.

**Liabilities** are forecast at $127.3 billion at March 31, 2026, $4.9 billion lower than at March 31, 2025.

Taxpayer-supported debt is estimated at $84.3 billion, $0.9 billion less than 2025.

• Liabilities for capital projects are down $0.9 billion from March 31, 2025, and up $1.8 billion from budget including decrease of $103 million in principal repayments under public-private partnership
(P3) alternative financing arrangements without any additional new P3 financing.

• Fiscal Plan debt remains largely unchanged from March 31, 2025 and budget at $34.2 billion.

• Debt issued to support loans to AFSC and to local authorities is increasing by a net $1.8 billion from the prior year.

• Other liabilities are $5.3 billion lower than the prior year. These include liabilities of the schools, universities, colleges, hospitals (SUCH) sector, natural gas royalty and security deposits, unearned revenue,
estimated corporate income tax refunds, trade payables, other liabilities of AFSC, coal phase out liabilities, asset retirement obligations and derivative financial instruments.

• Government obligations for pension plan liabilities have decreased by $0.4 billion.

**Net financial debt** (financial assets less liabilities) as at March 31, 2026, is estimated at $42.2 billion, $7.8 billion greater than on March 31, 2025, reflecting the increase in the deficit forecast for 2025-26. Net debt to GDP is estimated at 8.7 per cent.

**Capital and other non-financial assets** of $64.3 billion are forecast for March 31, 2026, a $1.4 billion net increase from March 31, 2025, mainly displaying the difference between capital asset acquisition (capital investment less contingency) and amortization expense. Deferred capital contribution liabilities increased by $29 million mostly due to carry forward funds from 2024-25.

**Net Assets - operating** of $14.5 billion are forecast as at March 31, 2026, a $6.5 billion decrease from 2024-25, reflecting the higher deficit forecast for 2025-26.

**Net Assets** of $18 billion are forecast as at March 31, 2026, consisting of net assets - operating and accumulated remeasurement gains and losses.

**2025–26 First Quarter \|** Fiscal Update and Economic Statement<sub>7</sub>

------

Fiscal Framework

The government's framework, introduced in *Budget 2023,* was designed to manage Alberta's unique economic and revenue volatility and includes allowable exceptions for when the government can run a deficit, including when there is a drop in revenue of $1 billion from the prior year third quarter forecast. The *Sustainable Fiscal Planning and Reporting Act* also limits the size of the deficit to the difference between the revenue forecast for 2025-26 and the 2024-25 third quarter revenue forecast. The deficit is limited to $7.7 billion in 2025-26. The government is forecasting a deficit of $6.5 billion in 2025-26.

The framework also limits in-year expense increases, adjusted to exclude expense that is directly offset by a related increase to revenue and non-cash, non-recurring adjustments, to the voted, budgeted contingency. In 2025-26, the contingency is set at $4 billion.

Thus far in 2025-26, expense has increased by a total of $1.6 billion; $0.1 billion of the increase is offset by dedicated revenue and the remaining $1.5 billion is allocated from the contingency, leaving $2.5 billion unallocated in the contingency.

Expense increases offset by dedicated revenue include $62 million allocation for ICIP projects partially funded by the federal government, $56 million

**Budget 2025-26 Contingency** 

(millions of dollars)

---

| | | |
|:---|:---|:---|
|  |  | **4000** |
| &nbsp;&nbsp;&nbsp;&nbsp; Expense increases: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Emergency / disaster assistance | 706 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other | 847 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Expense increases | 1553 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Less dedicated revenue / expense | (95) |  |
| Preliminary contingency allocation | 1458 | (1458) |
|  **Contingency - unallocated** |  | **2542** |

---

for the new and unspent Federal Aging with Dignity Funding, $25 million for National School Food Program, $16 million for other minor increases such as reprofiling of Sustainable Canadian Agriculture Partnership funding from 2024-25 and establishing the Civil Forfeiture Fund as a statutory fund, which will enhance the accountability of the Alberta Civil Forfeiture program. These increases are offset by $64 million decrease in cost of selling oil.

**Surplus Cash Allocation** 

The framework also sets policies for the allocation of surplus cash. First, 50 per cent of surplus cash must go to improving government's net financial position, either through debt repayment or deposits in the Heritage Fund. The remaining 50 per cent goes to the Alberta Fund, with the three allowable uses remaining unchanged. Since the government is forecasting a deficit of $6.5 billion in 2025-26, there is no surplus cash available for debt allocation.

**Cash adjustments** to the surplus/deficit, such as differences between accrued revenue and expense, SUCH sector and entity results, and transfers not reported on the income statement are necessary to determine the cash balance available for allocation.

In 2025-26, the opening cash balance was $5.1 billion from the 2024-25 final results. Of this, $2.8 billion was allocated to the Heritage Fund and the remaining $2.3 billion is offsetting new borrowing requirements in 2025-26.

After cash adjustments totaling $5 billion to the deficit, there is no surplus cash available for allocation. The negative cash amount of $9.1 billion represents new, additional borrowing required in 2025-26. Details of the various cash adjustments are included below.

• **Retained income of funds and agencies** Funds and agencies retain $2.5 billion of the reported surplus, as this cash belongs to the funds and agencies and not the General Revenue
Fund (GRF).

This includes: $3.2 billion in income from HF and endowment funds, ATB Financial, AFSC, TIER Fund, other government business enterprises and entities. <br>

The net loss of $715 million reported by APMC in contrast, is the responsibility of APMC and GRF cash is not required. <br>

• **Other cash adjustments** $0.1 billion is forecast mainly in differences between accrued and cash revenue and expense and cash needed for student and other loans, and other changes
in financial assets and liabilities.

- The differences between energy royalties, PIT and CIT revenue and cash received are among the most significant and volatile cash adjustments.

• **Capital cash adjustments** A negative $2.5 billion cash adjustment mainly reflects non-SUCH capital investment cash requirement of
$4.1 billion not reported in the surplus, less non-SUCH non-cash amortization expense of $1.6 billion that is included in expense.

The government will continue to evaluate its financial position as the fiscal year unfolds.

**Surplus cash available for** 

**allocation / debt maturities** 

(billions of dollars)

---

| | |
|:---|:---|
| **Surplus cash available for allocation:** |  |
|  From 2024-25 results | **5.1** |
|  Allocation to Heritage Fund | **(2.8)** |
|  2025-26 deficit | (6.5) |
| &nbsp;&nbsp;&nbsp;&nbsp; less entity retained income | (2.5) |
| &nbsp;&nbsp;&nbsp;&nbsp; less capital plan requirements | (2.5) |
| &nbsp;&nbsp;&nbsp;&nbsp; less net other cash adjust. | (0.1) |
| &nbsp;&nbsp;&nbsp;&nbsp; ATB Financial dividend | 0.1 |
|  **Total cash available** | **(9.1)** |
|  **Debt maturities** |  |
|  2025-26 maturities | **17.4** |
|  2026-27 maturities | **5.8** |
|  2027-28 maturities | **7.3** |

---

---

| | |
|:---|:---|
| **8** | **2025–26 First Quarter \|** Fiscal Update and Economic Statement |

---

------

Capital Plan Highlights

The 2025-26 Capital Plan is forecast at $8.9 billion, up $294 million from *Budget 2025.* This increase includes $132 million in capital grants and $162 million in capital investment. Most of the increase is due to $160 million re-profiling of project cash flows from unspent funds in 2024-25. The adjustments align with scheduling and progress on projects, ensuing all projects continue to be delivered as committed in *Budget 2025.* 

The $132 million increase in capital grants is primarily from re-profiling for recovery community, affordable housing and federally funded infrastructure projects. The government also provided $21 million in new funding to support training and development in the aerospace sector.

The $162 million increase in capital investment includes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

• New funding of $89 million to accelerate construction of 11 previously announced school projects, $23 million from federally and entity own-source funded projects, and
municipal contributions to road infrastructure.

• Re-profiling of $50 million related to initiatives in health IT systems, agriculture and irrigation projects, wildfire prevention and preservation maintenance, technology and
innovation projects, and other government facilities and accommodation projects.

Of the re-profiling, $60 million in capital investment vote authority is carried over from 2024-25, $13 million for Primary and Preventative Health Services, $10 million for Agriculture and Irrigation, $8 million for

Technology and Innovation, $7 million for Mental Health and Addiction, $6 million for Public Safety and Emergency Services, $5 million for Forestry and Parks, and $11 million for other ministries. Factors contributing to shifts in project cash flow may include seasonal limitations affecting construction schedules, contractor availability, evolving regulatory or environmental requirements, and extended community or municipal consultations. Adjustments may also stem from shifting program priorities, project interdependencies, scope changes, and timing related to tendering, permitting, planning, or site readiness.

The Capital Plan is funded from various sources, including the federal government; donations; school boards; post-secondary institutions; health authorities; other funds and agencies; public-private partnerships; and the general revenue fund. More details can be found in the table on page 13.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Capital Plan Summary** | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Change** |
| (millions of dollars) | **2024-25** | **2025-26** | **2025-26** | **from** |
|  | **Actual** | **Budget** | **Forecast** | **Budget** |
|  Advanced Education | 663 | 501 | **504** | 2 |
|  Affordability and Utilities | 7 | 8 | **8** |  |
|  Agriculture and Irrigation | 107 | 99 | **110** | 10 |
|  Arts, Culture and Status of Women | 91 | 63 | **69** | 6 |
|  Assisted Living and Social Services | 307 | 532 | **579** | 47 |
|  Children and Family Services | 4 | 1 | **4** | 2 |
|  Education and Childcare | 834 | 1056 | **1156** | 100 |
|  Energy and Minerals | 185 | 232 | **233** |  |
|  Environment and Protected Areas | 53 | 97 | **84** | (13) |
|  Forestry and Parks | 110 | 107 | **115** | 8 |
|  Hospital and Surgical Health Services | 742 | 422 | **422** |  |
|  Indigenous Relations | 14 | 10 | **15** | 5 |
|  Infrastructure | 289 | 1076 | **1077** | 1 |
|  Jobs, Economy, Trade and Immigration | 5 | 3 | **27** | 24 |
|  Justice | 11 | 18 | **23** | 6 |
|  Mental Health and Addiction | 97 | 129 | **163** | 34 |
|  Municipal Affairs | 1040 | 1131 | **1145** | 15 |
|  Primary and Preventative Health Services | 14 | 22 | **35** | 13 |
|  Public Safety and Emergency Services | 11 | 31 | **39** | 8 |
|  Service Alberta and Red Tape Reduction | 40 | 72 | **72** |  |
|  Technology and Innovation | 174 | 282 | **305** | 22 |
|  Tourism and Sport | 10 | 15 | **15** |  |
|  Transportation and Economic Corridors | 2421 | 2718 | **2720** | 3 |
|  Treasury Board and Finance | 12 | 9 | **9** |  |
|  Legislative Assembly | 2 | 4 | **4** | 1 |
|  **Total Capital Plan** | **7243** | **8639** | **8933** | **294** |

---

**2025–26 First Quarter \|** Fiscal Update and Economic Statement<sub>9</sub>

------

*Local Government Fiscal Framework Act Report* 

The *Local Government Fiscal Framework Act* (LGFF) sets out the funding model for capital grants to Alberta municipalities and Metis Settlements. This model allows the Government of Alberta to share revenue changes with local governments, including both increases and decreases.

As required by the *LGFF Act,* the total funding available in 2027-28 for Calgary, Edmonton and all other local governments allocation must be made public by September 30, 2025. This provides Alberta local governments with an understanding of provincial government funding for capital projects two years in advance and facilitates better capital planning, project management, and budgeting.

The total funding for 2027-28 is calculated based on the change in provincial government revenues between 2023-24 and 2024-25, adjusted for any policy changes of over $100 million and excluding revenue from Technology Innovation and Emissions Reduction Fund. As a result, 2027-28 LGFF funding is increasing to $895 million due to an increase in provincial revenue in 2024-25 compared to 2023-24.

Allocations for Edmonton and Calgary are calculated based on population, education property tax requisition and kilometres of open roads maintained by each city, all from the fiscal year 2024-25. The allocation formula for other local government is based on population, tangible capital assets,

cumulative amortization, length of local roads and base funding for all local governments, and needs-based funding for communities with limited local assessment bases.

Allocations for other local governments will be posted on the LGFF website in September. (<u>alberta.ca/local-government-fiscal-framework-capital-funding</u>)

**Local Government Fiscal Framework Capital Funding** 

(millions of dollars)

---

| | | | |
|:---|:---|:---|:---|
|  | **Previously Published** | **Previously Published** | |
| | **2025-26** | **2026-27** | **2027-28** |
|  Calgary | 255 | 249 | 282 |
|  Edmonton | 179 | 174 | 191 |
|  Local Governments (Excluding Calgary and Edmonton) | 386 | 377 | 422 |
|  **Total Local Government Fiscal Framework Capital Funding** | **820** | **800** | **895** |

---

---

| | |
|:---|:---|
| **10** | **2025–26 First Quarter \|** Fiscal Update and Economic Statement |

---

------

2025-26 First Quarter Fiscal Update Tables

**Consolidated Fiscal Summary** 

(millions of dollars)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Change**<br> **from**<br> **Budget** | **Change**<br> **from**<br> **Budget** |
|  | **2024-25** | **2024-25** | **2025-26** | **2025-26** | **2025-26** | **2025-26** | **Change**<br> **from**<br> **Budget** | **Change**<br> **from**<br> **Budget** |
| | **Actual** | **Actual** | **Budget** | **Budget** | **Forecast** | **Forecast** | **Change**<br> **from**<br> **Budget** | **Change**<br> **from**<br> **Budget** |
|  **Total Revenue** |  | **82469** |  | **74138** |  | **72967** |  | **(1171** |
|  **Expense** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating expense |  | 62025 |  | 64311 |  | **64989** |  | 679 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; % change from prior year | | *6.7* | | *3.7* | **** | ***4.8*** | | *-* |
| &nbsp;&nbsp;&nbsp;&nbsp; Capital grants |  | 2934 |  | 3452 |  | **3584** |  | 132 |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization / inventory consumption / loss on disposals |  | 4446 |  | 4993 |  | **4993** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Taxpayer-supported debt servicing costs |  | 2437 |  | 2348 |  | **2418** |  | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp; Self-supported debt servicing costs |  | 777 |  | 620 |  | **586** |  | (34) |
| &nbsp;&nbsp;&nbsp;&nbsp; Pension provisions |  | (403) |  | (375) |  | **(375** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Disaster and emergency assistance |  | 1932 |  | - |  | **706** |  | 706 |
| &nbsp;&nbsp;&nbsp;&nbsp; **Expense before contingency** |  | 74149 |  | 75349 |  | **76902** |  | 1554 |
| &nbsp;&nbsp;&nbsp;&nbsp; Contingency (forecast un-allocated) |  | - |  | 4000 |  | **2542** |  | (1458 |
|  **Total Expense** |  | **74149** |  | **79349** |  | **79444** |  | **95** |
|  **Surplus / Deficit** |  | **8320** |  | **(5211** |  | **(6477** |  | **(1267** |
|  **Capital Plan** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Capital grants |  | 2934 |  | 3452 |  | **3584** |  | 132 |
| &nbsp;&nbsp;&nbsp;&nbsp; Capital investment |  | 4309 |  | 5187 |  | **5348** |  | 162 |
|  **Total Capital Plan** |  | **7243** |  | **8639** |  | **8933** |  | **294** |
| **Cash Adjustments / Borrowing Requirements** |  |  | **(at March 31)** | **(at March 31)** | **(at March 31)** | **(at March 31)** |  |  |
|  **Cash at start of year / Alberta Fund** |  | 3667 |  | 2167 |  | **5142** |  | 2975 |
| &nbsp;&nbsp;&nbsp;&nbsp; Alberta Fund allocation - Heritage Fund |  | (2000) |  | (1084) |  | **(2843** |  | (1759) |
|  **Surplus / (deficit)** |  | 8320 |  | (5211) |  | **(6477** |  | (1267) |
|  **Cash adjustments** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Retained income of funds and agencies |  | (2111) |  | (1949) |  | **(2514** |  | (566) |
| &nbsp;&nbsp;&nbsp;&nbsp; Other cash adjustments |  | (632) |  | 533 |  | **(67** |  | (600) |
| &nbsp;&nbsp;&nbsp;&nbsp; Capital cash adjustments |  | (2203) |  | (1915) |  | **(2469** |  | (555) |
| &nbsp;&nbsp;&nbsp;&nbsp; ATB Financial dividend |  | 100 |  | 100 |  | **100** |  | - |
|  **Surplus cash (cash at start of year + surplus +/- net cash adjustments) / Heritage Fund** |  | 5142 |  | (7357) |  | **(9129** |  | (1772) |
| &nbsp;&nbsp;&nbsp;&nbsp; Less: Taxpayer-supported debt repayment / Heritage Fund |  | (2571) |  |  |  | **-** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Less: Allocation to Alberta Fund |  | (2571) |  |  |  | **-** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Direct borrowing required |  | - |  | 7357 |  | **9129** |  | 1772 |
|  **Cash at end of year** |  | - |  | - |  | **-** |  | - |
|  **Taxpayer-supported Liabilities / Borrowing** |  |  |  |  |  |  |  |  |
|  **Total Taxpayer-supported debt** |  | **85225** |  | **82539** |  | **84310** |  | **1771** |

---

**2025–26 First Quarter \|** Fiscal Update and Economic Statement<sub>11</sub>

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Disaster and Emergency Assistance** | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Change**<br> **from**<br> **Budget** |
| (millions of dollars) | **2024-25** | **2025-26** | **2025-26** | **Change**<br> **from**<br> **Budget** |
|  | **Actual** | **Budget** | **Forecast** | **Change**<br> **from**<br> **Budget** |
|  Agriculture and Irrigation – agriculture support | 1039 |  | **-** |  |
|  Assisted Living and Social Services - wildfire supports | 14 |  | **-** |  |
|  Forestry and Parks - wildfire fighting | 702 |  | **706** | 706 |
|  Municipal Affairs - wildfire support | 19 |  | **-** |  |
|  Public Safety and Emergency Services – wildfire / flood support | 158 | - | **-** | - |
|  **Total Disaster and Emergency Assistance Expense** | **1932** | **-** | **706** | **706** |
| **Capital Amortization** |  |  |  |  |
| (millions of dollars) | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Change**<br> **from**<br> **Budget** |
|  | **2024-25** | **2025-26** | **2025-26** | **Change**<br> **from**<br> **Budget** |
|  | **Actual** | **Budget** | **Forecast** | **Change**<br> **from**<br> **Budget** |
|  Advanced Education | 539 | 573 | **573** |  |
|  Affordability and Utilities | 1 | 2 | **2** |  |
|  Agriculture and Irrigation | 29 | 40 | **40** |  |
|  Arts, Culture and Status of Women | 7 | 7 | **7** |  |
|  Assisted Living and Social Services | 71 | 70 | **70** |  |
|  Education and Childcare | 542 | 505 | **505** |  |
|  Energy and Minerals | 12 | 13 | **13** |  |
|  Environment and Protected Areas | 3 | 4 | **4** |  |
|  Forestry and Parks | 27 | 39 | **39** |  |
|  Hospital and Surgical Health Services | 565 | 315 | **315** |  |
|  Infrastructure | 170 | 425 | **425** |  |
|  Jobs, Economy, Trade and Immigration | 1 | 1 | **1** |  |
|  Justice | 7 | 7 | **7** |  |
|  Mental Health and Addiction | 1 |  | **-** |  |
|  Primary and Preventative Health Services | 7 | 18 | **18** |  |
|  Public Safety and Emergency Services | 28 | 29 | **29** |  |
|  Service Alberta and Red Tape Reduction | 17 | 18 | **18** |  |
|  Technology and Innovation | 67 | 70 | **70** |  |
|  Transportation and Economic Corridors | 848 | 884 | **884** |  |
|  Treasury Board and Finance | 23 | 24 | **24** |  |
|  Legislative Assembly | 1 | 3 | **3** | - |
|  **Total Amortization Expense** | **2968** | **3048** | **3048** | **-** |
| **Inventory Consumption** |  |  |  |  |
| (millions of dollars) | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Change**<br> **from**<br> **Budget** |
|  | **2024-45** | **2025-26** | **2025-26** | **Change**<br> **from**<br> **Budget** |
|  | **Actual** | **Budget** | **Forecast** | **Change**<br> **from**<br> **Budget** |
|  Advanced Education | 54 | 203 | **203** |  |
|  Arts, Culture and Status of Women | 1 | 1 | **1** |  |
|  Assisted Living and Social Services | 40 | 41 | **41** |  |
|  Education and Childcare | 24 |  | **-** |  |
|  Forestry and Parks |  | 1 | **1** |  |
|  Hospital and Surgical Health Services | 1133 | 1322 | **1322** |  |
|  Infrastructure | 1 | 2 | **2** |  |
|  Mental Health and Addiction | 16 | 17 | **17** |  |
|  Primary and Preventative Health Services | 113 | 286 | **286** |  |
|  Public Safety and Emergency Services |  | 1 | **1** |  |
|  Service Alberta and Red Tape Reduction | 4 | 6 | **6** |  |
|  Transportation and Economic Corridors | 62 | 66 | **66** | - |
|  **Total Inventory Consumption Expense** | **1448** | **1945** | **1945** | **-** |

---

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| | |
|:---|:---|
| **12** | **2025–26 First Quarter \|** Fiscal Update and Economic Statement |

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**Debt Servicing Costs** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| (millions of dollars) | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Change**<br> **from**<br> **Budget** |
|  | **2024-25** | **2025-26** | **2025-26** | **Change**<br> **from**<br> **Budget** |
|  | **Actual** | **Budget** | **Forecast** | **Change**<br> **from**<br> **Budget** |
|  **Taxpayer-supported general debt servicing costs** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Education and Childcare – school boards | 10 | 9 | **9** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Treasury Board and Finance | 991 | 954 | **985** | 31 |
|  **Total** | **1001** | **963** | **993** | **31** |
|  **Taxpayer-supported Capital Plan debt servicing costs** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Education and Childcare – Alberta Schools Alternative Procurement P3s | 33 | 33 | **33** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transportation and Economic Corridors– ring road P3s | 115 | 112 | **112** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Treasury Board and Finance – direct borrowing | 1288 | 1240 | **1279** | 40 |
|  **Total** | **1436** | **1385** | **1425** | **40** |
|  **Total taxpayer-supported debt servicing costs** | **2437** | **2348** | **2418** | **70** |
|  **Self-supported debt servicing costs** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Treasury Board and Finance – loans to local authorities | 671 | 523 | **489** | (34) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Treasury Board and Finance – Ag. Financial Services Corp. | 106 | 97 | **97** | - |
|  **Total** | **777** | **620** | **586** | **(34)** |
|  **Total Debt Servicing Costs** | **3215** | **2968** | **3004** | **37** |
| **Inventory Acquisition** |  |  |  |  |
| (millions of dollars) | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Change**<br> **from**<br> **Budget** |
|  | **2024-25** | **2025-26** | **2025-26** | **Change**<br> **from**<br> **Budget** |
|  | **Actual** | **Budget** | **Forecast** | **Change**<br> **from**<br> **Budget** |
|  Advanced Education | 48 | 197 | **197** |  |
|  Arts, Culture and Status of Women | 1 | 1 | **1** |  |
|  Education and Childcare | 25 |  | **-** |  |
|  Forestry and Parks | 2 | 1 | **1** |  |
|  Hospital and Surgical Health Services | 1182 | 1364 | **1364** |  |
|  Infrastructure | 1 | 2 | **2** |  |
|  Mental Health and Addiction | 16 | 17 | **17** |  |
|  Primary and Preventative Health Services | 113 | 163 | **163** |  |
|  Service Alberta and Red Tape Reduction | 3 | 6 | **6** |  |
|  Transportation and Economic Corridors | 61 | 66 | **66** | - |
|  **Total Inventory Acquisition** | **1451** | **1817** | **1817** | **-** |
| **Capital Plan Funding Sources** |  |  |  |  |
| (millions of dollars) | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Change**<br> **from**<br> **Budget** |
|  | **2024-25** | **2025-26** | **2025-26** | **Change**<br> **from**<br> **Budget** |
|  | **Actual** | **Budget** | **Forecast** | **Change**<br> **from**<br> **Budget** |
|  Capital Plan (net of accrued expense vs cash outlays), less | 7243 | 8639 | **8933** | 293 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-cash adjustments | 273 | 40 | **18** | (21) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital Plan funding requirements | - | (800) | **(800)** | - |
|  Funding required | **7517** | **7879** | **8151** | **272** |
|  Source of funding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash received / assets donated / book value of disposals | 754 | 780 | **857** | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained income of funds and agencies | 34 | 35 | **37** | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SUCH sector self-financed | 872 | 487 | **543** | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technology Innovation and Emissions Reduction Fund | 18 | 40 | **40** | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alternative financing (P3s – public-private partnerships) | 4 |  | **-** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General revenue fund cash / direct borrowing | 5836 | 6537 | **6674** | 137 |
|  **Total Capital Plan Funding Sources** | **7517** | **7879** | **8151** | **272** |

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**2025–26 First Quarter \|** Fiscal Update and Economic Statement<sub>13</sub>

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| | | | | |
|:---|:---|:---|:---|:---|
| **Cash Adjustments / GRF Cash and Allocation** |  |  |  |  |
| (millions of dollars) |  |  |  |  |
|  | **Fiscal Year** | **Fiscal Year** | **Fiscal Year** | **Change**<br> **from**<br> **Budget** |
|  | **2024-25** | **2025-26** | **2025-26** | **Change**<br> **from**<br> **Budget** |
|  | **Actual** | **Budget** | **Forecast** | **Change**<br> **from**<br> **Budget** |
|  **Balance at Start of Year** | **3667** | **2167** | **5142** | 2975 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alberta Fund allocation - Heritage Fund | (2000) | (1084) | **(2843)** | (1759) |
|  **Surplus / (Deficit)** | 8320 | (5211) | **(6477)** | (1267) |
|  **Cash Adjustments** (negative = cash requirement; positive = cash source) |  |  |  |  |
|  **Retained Income of Funds and Agencies** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alberta Heritage Savings Trust Fund | (1871) | (988) | **(1473)** | (485) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ATB Financial | (348) | (285) | **(285)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Agriculture Financial Services Corporation | 46 | (1054) | **(1074)** | (20) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Heritage Foundation for Medical Research Endowment Fund | (169) | (100) | **(123)** | (23) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Heritage Science and Engineering Research Endowment Fund | (86) | (56) | **(87)** | (31) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Heritage Scholarship Fund | (79) | (66) | **(97)** | (31) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alberta Social Housing Corporation | 7 | 13 | **49** | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Credit Union Deposit Guarantee Corporation | (17) | (15) | **(15)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alberta Petroleum Marketing Commission | 616 | 674 | **715** | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technology Innovation and Emissions Reduction Fund | (89) |  | **(73)** | (73) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Balancing Pool | (50) | (57) | **(63)** | (6) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other | (72) | (14) | **12** | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Retained Income of Funds and Agencies** | **(2111)** | **(1949)** | **(2514)** | **(566)** |
|  **Other Cash Adjustments** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SUCH sector own-source revenue | (6805) | (6243) | **(6567)** | (324) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SUCH sector own-source expense | 7075 | 7328 | **7087** | (241) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net deferred capital contribution cash adjustment | 4 | (72) | **(19)** | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Energy royalties (difference between accrued revenue & cash) | 552 | (37) | **298** | 335 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Student loans | (296) | (317) | **(317)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other cash adjustments | (733) | (427) | **(396)** | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2013 Alberta flood assistance revenue / expense |  | 468 | **-** | (468) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Wood Buffalo wildfire revenue / expense | (1) | 98 | **98** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pension provisions (non-cash expense) | (403) | (375) | **(375)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory acquisition (excluding SUCH sector; non-cash expense) | (205) | (199) | **(238)** | (39) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory consumption (excluding SUCH sector; non-cash expense) | 180 | 308 | **362** | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Other Cash Adjustments** | **(632)** | **533** | **(67)** | **(600)** |
|  **Capital cash adjustments** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital investment (excluding SUCH sector self-financed) | (3437) | (4013) | **(4805)** | (792) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital Plan contingency |  | 800 | **800** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current principal repayments (P3s – public-private partnerships) | (74) | (103) | **(103)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alternative financing (P3s – public-private partnerships) | 4 |  | **-** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization (excluding SUCH sector; non-cash expense) | 1305 | 1402 | **1639** | 237 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Book value of asset disposals (net non-cash expense / revenue) | - | - | **-** | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Capital Cash Adjustments** | **(2203)** | **(1915)** | **(2469)** | **(555)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ATB Financial dividend | 100 | 100 | **100** | **-** |
|  **Total Cash Adjustments** | **(4845)** | **(3230)** | **(4951)** | **(1720)** |

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|:---|:---|
| **14** | **2025–26 First Quarter \|** Fiscal Update and Economic Statement |

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## Fiscal Update and

## Economic Statement
2025-26 First Quarter

![LOGO](g874552dsp05.gif)

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Economic Update

**Overview** 

Alberta's economy has shown resilience, supported by less severe U.S. tariffs on Canadian goods than initially anticipated in *Budget 2025.* The Alberta Activity Index, a measure of provincial economic activity, eased in May but remains up 2.2 per cent year-over-year and 3.1 per cent year-to-date (YTD). Robust gains in energy sector activity are helping to offset weakness in manufacturing and agriculture, which are contending with trade headwinds. Consumer spending is also outperforming expectations, buoyed by a pull forward in demand, a resilient labour market, and easing inflation. Alberta's real gross domestic product (GDP) is now forecast to rise 2.0 per cent in 2025, up 0.2 percentage points from budget, though still slower than last year's pace of 2.7 per cent (Chart 1). Private sector forecasters are expecting Alberta to lead the provinces in growth this year.

Momentum is expected to ease in the second half of the year and into 2026 as U.S. tariffs, lingering uncertainty and slower global growth dampen activity. A pullback in private sector investment intentions will weigh on business investment next year, while slower job gains and population growth will dampen consumer spending and residential construction investment. Alberta's real GDP growth is expected to slow to 1.7 per cent in 2026, same as budget.

Alberta's labour market has held up in the first half of the year, although momentum is slowing. Stronger-than-expected gains have led to an upward revision in employment, which is now forecast to rise 2.5 per cent in 2025, 0.6 percentage points higher than budget. Despite the upward revision, employment will lag behind the rapid increase in the labour force. As a result, the unemployment rate is expected to stay high, averaging 7.2 per cent in 2025. Despite slower job gains next year, the unemployment rate is forecast to ease amid slower population growth and a muted labour force participation rate.

The outlook for Alberta's economy remains highly uncertain. U.S. trade policy is unpredictable and there is uncertainty regarding how consumers and businesses will adapt to the tariffs. An escalation of U.S. trade protectionist measures could lead to a sharper

slowdown in the global economy, which in turn would dampen Alberta's export demand and put downward pressure on oil prices. This could also disrupt supply chains and add to inflationary pressures.

**U.S. trade policy clouds global outlook** 

Trade policy uncertainty has increased since budget. In early April, the U.S. announced global reciprocal tariffs on many of its trading partners, marking a significant shift in trade policy. While trade tensions have eased, with several countries including the EU, Japan, the U.K., and Vietnam securing trade agreements with the U.S., tariff levels remain historically high. The effective U.S. tariff rate has surged from about 2.4

per cent in 2024 to over 20 per cent by August 2025, the highest level in nearly a century.

Although trade policy uncertainty has receded from its peak in the spring, it remains elevated. This is weighing on the global outlook (Chart 2). The global economy has been resilient so far this year, but momentum is anticipated to slow in the second half as the temporary boost from front-loaded trade activity fades and the impact of tariffs works its way through. The International Monetary Fund (IMF) is projecting global growth at 3.0 per cent in 2025 and 3.1 per cent in 2026 – down 0.3 and 0.2 percentage points, respectively, from its January 2025 forecast. Growth was downgraded in nearly all countries, with the largest

**Chart 1: 2025 outlook improves** 

Year-over-year growth in selected economic indicators, 2025

![LOGO](g874552dsp022a.gif)

Source: Alberta Treasury Board and Finance, \*Unemployment rate is forecasted level

**Chart 2: Global economic outlook downgraded, particularly for U.S.** 

Estimates and forecasts of economic growth, global and selected countries

![LOGO](g874552dsp022b.gif)

Source: IMF World Economic Outlook

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| **16** | **2025–26 First Quarter \|** Fiscal Update and Economic Statement |

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revision in the U.S. In particular, U.S. growth was revised to 1.9 per cent this year, 0.8 percentage points lower than the January outlook, and a sharp deceleration from 2.8 per cent in 2024. Despite the slower growth, the U.S. is expected to outpace other advanced economies.

**U.S. tariffs on Canada ease** 

While broad-based U.S. tariffs against the rest of the world remain in place, Canadian goods are facing less severe tariffs than assumed in budget. Exemptions for CUSMA-compliant products have lowered Canada's effective tariff rate, particularly for Alberta, where energy accounts for a large share of overall goods exports (Chart 3). It is estimated that about 90 per cent of Alberta's energy exports are CUSMA compliant and tariff-free. The remaining 10 per cent of energy exports that are not CUSMA compliant

face a 10 per cent tariff, lower than the rate applied to most other goods. Alberta is also less exposed than other provinces to U.S. tariffs on steel, aluminum, and autos. Even so, the risk of higher tariffs remains a source of uncertainty, at least through 2026 (see <u>Economic Spotlight: Economic Effects of U.S. Tariffs on Alberta</u>).

With tariffs on Canadian goods lower than expected, the near-term outlook for Canada has improved. Canada's real GDP growth is now forecast at 1.2 per cent in 2025 – 0.4 percentage points higher than budget – but still below last year's pace of 1.6 per cent. The Bank of Canada is expected to cut interest rates albeit at a more cautious pace, as it continues to assess the impact of tariffs on the Canadian economy and underlying inflation.

**Chart 3: Alberta's effective tariff rate the lowest among provinces** 

Effective U.S. imposed tariff rate against goods imports from Canada, by province

![LOGO](g874552dsp023a.gif)

Sources: National Bank of Canada (NBC), Government of Alberta (GoA), Statistics Canada, U.S.<br> International Trade Commission; \* July 2025 est., \*\*as of May 2025

**Chart 4: Oil prices weaker than expected this fiscal year** 

Price of West Texas Intermediate (WTI)

![LOGO](g874552dsp023b.gif)

Sources: Haver Analytics, Reuters and Alberta Treasury Board and Finance, f-forecast

**Oil prices pull back** 

Expectations of softer global growth and a faster supply increase from OPEC+ have weighed on oil prices. West Texas Intermediate (WTI) oil price plunged in April following the U.S. announcement of broad-based tariffs and OPEC+'s decision to accelerate production increases (Chart 4). Heightened geopolitical tensions in the Middle East briefly lifted prices above US$70 per barrel (/bbl) in June, but the rally quickly faded as fears of major supply disruptions eased. Despite the volatility, WTI averaged US$63.70/ bbl in the second quarter of 2025, down sharply from earlier in the year. The WTI oil price forecast has been revised down to US$63.75/bbl for 2025-26, US$4.25/ bbl lower than budget. While underlying market fundamentals remain healthy to date, tariffs and ongoing uncertainty are expected to weigh on oil demand and keep a lid on prices in the short term.

**Narrower differential provides cushion** 

The discount between WTI and Western Canadian Select (WCS) has narrowed significantly since budget, helping to offset the revenue impact of weaker WTI prices. The differential is forecast to average US$11.90/bbl in 2025–26, US$5.20/bbl narrower than budget. This improvement reflects strong demand for heavier crude, supported by robust distillate margins and tighter supply due to reduced exports from Mexico and extended oil sands maintenance. Higher U.S. refinery utilization and expanded access to international markets following the completion of Trans Mountain Expansion (TMX) last year have also contributed to the tighter differential.

A stronger Canadian dollar, however, is expected to reduce netback prices and royalty revenues. WCS price is now forecast to average Cdn$71.40/bbl this fiscal year, Cdn$1.70/bbl lower than budget. The Loonie has appreciated strongly since April on the back of a weaker U.S. dollar. It is now forecast at 72.5 US¢/Cdn$ in 2025-26, an increase of 2.9 US¢/Cdn$ from budget.

**Natural gas prices under pressure** 

Western Canadian natural gas prices have weakened since budget amid oversupply and muted demand growth. Demand has been held back by the slow ramp-up of the newly constructed LNG Canada

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|:---|:---|
| **2025–26 First Quarter \|**Fiscal Update and Economic Statement | **17** |

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facility and persistent pipeline export bottlenecks. These, along with above-average storage levels, have weighed on prices. The Alberta Reference Price (ARP) is now forecast to average Cdn$2.20 per gigajoule (/GJ) in 2025-26, Cdn$0.40/ GJ lower than budget. Prices are expected to strengthen later in the year as seasonal demand picks up and export capacity gradually improves.

**Energy sector holding strong** 

Activity in the energy sector remains resilient despite lower prices and disruptions. Drilling activity rose one per cent YTD through July, despite wildfire-related disruptions in late May and early June. Oil production also rebounded to seasonal highs following spring maintenance shutdowns, and was up 3.3 per cent in the first half of the year.

Robust production growth and higher utilization of expanded pipeline capacity are driving export gains. Alberta's oil export volumes rose 4.0 per cent YTD, with notable increases to other provinces and international destinations. In particular, exports to China saw a notable surge, supported by increased flows through the TMX pipeline. Natural gas shipments have also been strong, climbing 2.2 per cent YTD through June, supported by solid demand from the rest of Canada.

Investment in the oil and gas extraction sector is forecast to grow around five per cent (or $1.8 billion) in 2025, in line with last year's pace, before moderating slightly to 4.6 per cent next year. Growth

will be led by the oil sands sector, where spending is expected to remain focused on optimization projects and debottlenecking initiatives aimed at maximizing existing capacity. Meanwhile, weak natural gas prices are expected to weigh on conventional investment this year.

**Trade headwinds weigh on manufacturing...** 

The manufacturing industry is bearing the brunt of rising trade protectionism. After temporarily surging earlier in the year as firms frontloaded shipments ahead of tariffs, non-energy exports to the U.S. have pulled back sharply in recent months. Increased exports to other markets have provided some offset, but the total value of Alberta's non-energy exports in June remains well below the level recorded a year earlier (Chart 5). The decline has been most pronounced in industries that rely heavily on the U.S. market and often compete directly with American producers, such as basic and industrial chemicals, as well as forestry products and building and packaging materials. In addition to higher U.S. lumber duties, the wood manufacturing sector is grappling with slower housing market activity in both the U.S. and Canada. Food product manufacturing sales in the province have also pulled back from last year and are down 3.9 per cent YTD through June.

Weakness in these sectors is expected to persist, with slower growth in the U.S. and global economy adding further drag. Overall, real manufacturing exports are expected to contract 1.8 per cent in 2025,

**Chart 5: Non-energy exports retreat following pre-tariff surge** 

Value of Alberta non-energy exports

![LOGO](g874552dsp024.gif)

Sources: Statistics Canada and Haver Analytics

compared with a 0.5 per cent decline anticipated at budget, before partially recovering to 1.5 per cent in 2026.

**...and agriculture exports** 

Alberta's agri-food exports showed resilience in the first half of 2025, but several headwinds are expected to dampen performance in the second half. The value of Alberta's overall agri-food exports edged up 0.4 per cent YTD, although exports to the U.S. and China – Alberta's top two agri-food export destinations – are down 8 and 27 per cent, respectively. However, the industry has been successful in redirecting some trade flows – with exports to Japan, Mexico, and South Korea posting solid gains. Overall, while exports of beef, processed potatoes and oilseed cake and meal have fallen, year-over-year gains have been recorded for wheat, canola seed, live cattle, crude canola oil and pork. China's retaliatory tariffs on several Canadian agricultural and food products – including canola oil, canola meal, pork, and more recently canola seed – will weigh on exports, compounded by weaker U.S. demand.

Improved moisture conditions in most of Alberta during the growing season have led to expectations of above average 2025 crop yields, but weaker crop prices, tariff restrictions, and trade uncertainties are expected to weigh on crop export revenues. Meanwhile, animal exports volumes are projected to decline following last year's exceptionally strong performance, with a smaller cattle herd size constraining output.

**Private sector more cautious** 

The ongoing uncertainty and muted outlook for the manufacturing sector have begun to weigh on investment intentions. While private sector investment in building construction was up 2.3 per cent YTD through May, there has been a noticeable pullback in building permits in recent months. In particular, the value of permits for commercial and industrial buildings have plunged 36 per cent since reaching a nine-year high in February. Despite the steep drop in intentions, construction of existing projects appears largely unaffected. The rebound in business sentiment suggests that firms remain cautiously optimistic, helping to reinforce current commitments. Construction activity in the province has also been boosted by the institutional and governmental sector, where building

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investment is up more than 50 per cent YTD.

Outside building construction, investment in machinery and equipment (M&E) in the business sector surged 10 per cent year-over-year in the first quarter, largely driven by a pre-tariff rush. While some of this strength is expected to unwind in the coming quarters, M&E investment outside the oil and gas sector is poised to grow after three years of decline. Investment in engineering projects and intellectual property is also expected to contribute to growth.

Overall, growth in investment outside oil and gas extraction is forecast at 5.7 per cent this year, driven by ongoing projects and rising construction costs. Dow Chemical's delay to its Path2Zero petrochemical project is expected to weigh on investment outside oil and gas next year, and growth is forecast to slow to 4.4 per cent. In real (inflation-adjusted) terms, however, investment is expected to see muted recovery. It is forecast to rise about 1.5 per cent annually in 2025 and 2026 following declines in the previous three years.

**New housing activity soaring** 

Housing starts are booming as builders respond to years of undersupply. In the first half of the year, starts averaged almost 59,000 units at an annualized pace, up 32 per cent from last year and comparable to the levels seen in the far more populous provinces of Ontario and Quebec. Growth in 2025 has been led by purpose-built apartment rentals, with apartment-style condo starts holding strong. Meanwhile, the pace of single-

detached housing starts has slowed significantly over the past few months. Momentum in apartment construction is expected to moderate in the second half of the year as fewer new rental projects break ground. As a result, housing starts are forecast to average 48,000 units this year, higher than the budget forecast of 43,000. Starts are expected to moderate to around 40,000 units next year.

Despite the surge in housing starts, growth in real residential investment will be softer than expected compared to budget. It is forecast to rise 3.6 per cent in 2025, down from 6.2 per cent at budget. This partly reflects the shift in new housing construction towards multi-unit dwellings, which tend to have longer construction time frames and lower per-unit costs. In addition, weak renovation spending and a slowdown in resale housing activity are expected to be a drag on investment. In the resale market, Calgary has seen a sharp pullback after years of strong home sales and tight conditions, while activity in Edmonton remains below last year's level. Other regional markets, however, have remained strong so far. Easing conditions in the resale market are also expected to weigh on new housing construction activity.

**Population growth slows** 

Alberta's population growth is moderating as the 2025-2027 Federal Immigration Levels Plan takes effect. In the first quarter of 2025, Alberta's population was up 138,000 from a year ago, representing an increase of 2.9 per cent. While still robust, this marks the slowest annual growth rate since the third quarter of 2022. With

**Chart 6: Alberta's population growth slowing** 

Annual change in the Alberta population by migration component

![LOGO](g874552dsp025.gif)

Sources: Statistics Canada, Haver Analytics and Alberta Treasury Board and Finance; f-forecast

lower federal immigration targets, net international immigration has continued to ease after peaking in 2024. Alberta also recorded a net outflow of non-permanent residents (NPRs) for the first time in three years. Meanwhile, net interprovincial migration remains historically strong but has eased from last year's remarkable pace. Alberta's population is now forecast to grow 2.4 per cent in the 2025 census year (Chart 6), down slightly from the budget forecast of 2.5 per cent, and well below the 4.4 per cent surge recorded in 2024.

Population growth is set to slow further to 1.3 per cent in the 2026 census year, as the full impact of the federal plan is felt. About 30,000 temporary residents are expected to leave the province next year. This will be offset by net inflows of interprovincial migrants (33,000), along with gains in immigration, which will continue albeit at a more moderate pace. With the downward revision, Alberta's population is now projected to be 12,000 lower by 2026 compared with budget.

**Employment holding up** 

Alberta's labour market has stayed resilient in the face of ongoing trade uncertainty. Despite losing momentum earlier in the year and the recent volatility, employment has increased by 4,600 since December 2024 and is up 2.6 per cent YTD through July (Chart 7). Stronger-than-expected gains have led to an upward revision in employment growth for 2025. It is now forecast at 2.5 per cent, 0.6 percentage points higher than budget. However, momentum is expected to remain subdued in the second half of this year and into 2026 as businesses remain cautious with hiring. Job vacancies have returned to pre-pandemic levels, and the job finding rate has continued to ease. Next year, employment growth is forecast to decelerate to 1.6 per cent in line with slower economic growth.

**Unemployment rate to stay high** 

Strong growth in Alberta's source population will keep the unemployment rate elevated this year. Although overall population growth has slowed, the source population – individuals aged 15 and older – has continued to rise at a rapid pace. This is driving Alberta's labour force growth, which is now forecast to expand 2.7 per cent this year – 0.4 percentage points above budget, but still slower than

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last year's exceptional pace of 4.3 cent.

With job gains trailing the rapid expansion in the labour force, the unemployment rate is projected to stay high, averaging 7.2 per cent. This is slightly below the budget forecast of 7.4 per cent, but still above last year's rate of 7.0 per cent. A decline in the labour force participation rate will provide some offset.

Next year, a reduction in NPRs and slowdown in immigration will dampen the labour force growth, which is expected to slow to 1.5 per cent. Elevated levels of international migration in recent years helped offset the impact of an ageing workforce, but this trend is reversing. As a result, a greater share of source population growth will come from younger workers aged 15-24 and older adults aged 65 and over, groups with lower participation rates. While participation rates among youth and prime-age workers are expected to rise modestly, demographic shifts will continue to weigh on the labour force participation rate. This will dampen the unemployment rate, which is forecast to ease to 7.0 per cent in 2026.

**Inflation lower with carbon tax removal** 

Consumer prices are growing at a much slower pace than anticipated at budget. Alberta's inflation fell dramatically and has been subdued since April following the removal of the consumer carbon tax. Meanwhile, retaliatory tariffs and a weaker Canadian dollar earlier in the year have put upward pressure on the prices of certain goods. There has been a notable pickup in year-over-year price increases for some products. After spending most of 2024 in negative territory, durable and semi-durable goods inflation has picked up, with an acceleration in inflation for clothing and furniture, which are also subject to retaliatory tariffs. Despite these increases, the overall impact on inflation has been limited to date. Consumer inflation is now forecast to average 2.2 per cent in 2025, 0.4 percentage points lower than budget. Inflation is forecast to hold fairly steady at around 2.3 per cent next year.

**Consumer spending resilient** 

Consumer spending has held up better than expected so far this year. While retail sales have retreated from its record high in January, they remained up 5.3 per cent YTD through May on a seasonally unadjusted basis, and 3.0 per cent when adjusted for inflation. Sales at motor

**Chart 7: Employment holding up so far this year** 

Number of Albertans employed, seasonally adjusted

![LOGO](g874552dsp026a.gif)

Sources: Statistics Canada and Haver Analytics

**Chart 8: Retail spending up for most categories** 

Year-to-date growth in retail sales by category (seasonally unadjusted)

![LOGO](g874552dsp026b.gif)

Sources: Statistics Canada and Haver Analytics

vehicle and parts dealers have been particularly strong, where concerns over tariff-driven price hikes have accelerated purchases (Chart 8). Excluding motor vehicles, retail sales were up 3.6 per cent YTD, supported by a resilient labour market, falling interest rates and easing inflation. Rising population and solid growth have also boosted spending on services, such as housing and restaurant sales.

Given the year-to-date strength, growth in real consumer spending is now projected at 2.3 per cent in 2025, up from 1.9 per cent at budget. Momentum is expected to slow in the second half despite the rebound in sentiment, as the effects of front-loaded purchases fade and consumers remain cautious about spending. Next year, growth in

real consumer spending is forecast to moderate to 1.9 per cent, in line with slower population growth and moderating labour income growth.

On a per capita basis, real spending is projected to remain flat this year, before starting to recover in 2026. While still weak, this marks a significant improvement from 0.5 per cent projected at budget, and the sharper declines seen in 2023 and 2024.

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Key Energy and Economic Assumptions

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|:---|:---|:---|:---|:---|
| | | | **2025-26 Fiscal Year** | **2025-26 Fiscal Year** |
| <br> **Fiscal Year Assumptions** |<br> **2024-25 Actual** | **2025-26**<br> **3 Month Actual** | **Budget** | **1st Quarter** |
|  **Prices** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Crude Oil Price |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WTI (US$/bbl) | 74.34 | 64.00 | 68.00 | 63.75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Light-Heavy Differential (US$/bbl) | 13.06 | 10.20 | 17.10 | 11.90 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WCS @ Hardisty (Cdn$/bbl) | 85.21 | 74.10 | 73.10 | 71.40 |
| &nbsp;&nbsp;&nbsp;&nbsp; Natural Gas Price |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Alberta Reference Price (Cdn$/GJ) | 1.11 | 1.49 | 2.60 | 2.20 |
|  **Production** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Conventional Crude Oil (000s barrels/day) | 537 | 545 | 519 | 536 |
| &nbsp;&nbsp;&nbsp;&nbsp; Raw Bitumen (000s barrels/day) | 3449 | 3247 | 3558 | 3541 |
| &nbsp;&nbsp;&nbsp;&nbsp; Natural Gas (billions of cubic feet) | 4313 | 1093 | 4354 | 4379 |
|  **Interest rates** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; 3-month Canada Treasury Bills (per cent) | 3.90 | 2.63 | 2.30 | 2.50 |
| &nbsp;&nbsp;&nbsp;&nbsp; 10-year Canada Bonds (per cent) | 3.30 | 3.34 | 3.10 | 3.20 |
|  **Exchange Rate (US¢/Cdn$)** | 71.9 | 72.3 | 69.6 | 72.5 |

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|:---|:---|:---|:---|:---|:---|:---|
| | **2024 Calendar Year** | **2024 Calendar Year** | **2025 Calendar Year** | **2025 Calendar Year** | **2026 Calendar Year** | **2026 Calendar Year** |
| <br> **Calendar Year Assumptions** | **Budget** | **Actual** | **Budget** | **1st Quarter** | **Budget** | **1st Quarter** |
|  **Gross Domestic Product** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Nominal (millions of dollars) | 476611 | 474,506\* | 482457 | 483861 | 497048 | 492669 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per cent change | 5.3 | 4.9\* | 1.2 | 2.0 | 3.0 | 1.8 |
| &nbsp;&nbsp;&nbsp;&nbsp; Real (millions of 2017 dollars) | 367297 | 366,277\* | 373803 | 373465 | 380338 | 379630 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per cent change | 3.0 | 2.7\* | 1.8 | 2.0 | 1.7 | 1.7 |
|  **Other Indicators** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Employment (thousands) | 2519 | 2519 | 2567 | 2582 | 2609 | 2624 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per cent change | 3.1 | 3.1 | 1.9 | 2.5 | 1.6 | 1.6 |
| &nbsp;&nbsp;&nbsp;&nbsp; Unemployment Rate (per cent) | 7.0 | 7.0 | 7.4 | 7.2 | 7.2 | 7.0 |
| &nbsp;&nbsp;&nbsp;&nbsp; Average Weekly Earnings | 3.5 | 3.5 | 3.2 | 3.2 | 2.8 | 2.8 |
| &nbsp;&nbsp;&nbsp;&nbsp; (per cent change) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Primary Household Income | 7.1 | 6.4\* | 4.8 | 5.8 | 4.2 | 4.2 |
| &nbsp;&nbsp;&nbsp;&nbsp; (per cent change) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net Corporate Operating Surplus | 0.0 | -6.0\* | -9.0 | -7.5 | 1.2 | 2.0 |
| &nbsp;&nbsp;&nbsp;&nbsp; (per cent change) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Housing Starts (thousands of units) | 47.8 | 47.8 | 43.0 | 48.0 | 40.8 | 40.0 |
| &nbsp;&nbsp;&nbsp;&nbsp; Alberta Consumer Price Index | 2.9 | 2.9 | 2.6 | 2.2 | 2.4 | 2.3 |
| &nbsp;&nbsp;&nbsp;&nbsp; (per cent change) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Population (July 1st, thousands) | 4889 | 4889 | 5009 | 5004 | 5080 | 5068 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per cent change | 4.4 | 4.4 | 2.5 | 2.4 | 1.4 | 1.3 |

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<sup>\*</sup> Alberta Treasury Board and Finance estimate

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| **2025–26 First Quarter \|**Fiscal Update and Economic Statement | **21** |

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![LOGO](g874552dsp05.gif)