Article content
The shortfall of $5.2 billion in the fiscal year starting in April would be driven largely by a $4 billion drop in bitumen royalties and a $1.2 billion drop in personal and corporate income taxes, according to forecasts released Thursday.
Article content
Expenses are expected to rise 3.3 per cent to $75.3 billion.
Alberta stands to be among the Canadian provinces hardest hit by President Donald Trump’s planned tariffs as it provides the vast majority of the roughly 4 million barrels a day of crude the U.S. imports from its northern neighbour. While U.S. imports of Canadian energy products are facing a 10 per cent levy — less than half the proposed duty on other goods — a potential trade war still threatens to lower Alberta oil prices and volumes, reducing the resource revenue that accounts for about a quarter of the province’s inflows.
“While we work closely with partners to find solutions to a possible trade conflict, we will continue our work to make sure Alberta’s economy is strong — in and outside of the energy sector — so that we can manage any turbulence that comes our way,” Finance Minister Nate Horner said in a statement.
Trump’s 25 per cent tariffs on most U.S. imports from Canada and Mexico were set to take effect Feb. 4, then pushed back by a month after those countries’ leaders announced new border security measures. Trump said in a social media post Thursday that the levies are on track to go into place on March 4, saying drugs from the U.S.’s North American neighbours are still entering “at very high and unacceptable levels.”
Article content
In January, U.S. authorities seized 0.03 pounds of fentanyl at the northern border, according to figures from U.S. Customs and Border Protection. Longer-range data on drug seizures from CBP also suggest the amount of fentanyl coming from Canada is small — about 70 pounds since October 2021, compared with 67,000 pounds at the Mexico-US border.
With the trade threat looming, Alberta’s government said it’s taking a cautious approach to economic projections for this year, including a forecast that real gross domestic product growth will decelerate to 1.8 per cent from about 3 per cent in 2024.
Alberta projects population growth will slow to 2.5 per cent this year, down from a record 4.4 per cent in 2024. The province’s population has boomed in recent years amid an influx of Canadians from Ontario and British Columbia in search of more affordable housing.
Recommended from Editorial
U.S. benchmark West Texas Intermediate oil, which has a significant effect on the price of Canadian crude exports, is projected to average US$68 a barrel for the next fiscal year, down from $74 in the current fiscal cycle, the province said.
The government also said it will introduce a lower personal income bracket of 8 per cent on Albertans’ first $60,000 of income, saving Albertans as much as $750 in 2025.
The government expects total borrowing requirements to rise 0.8 per cent to $11.4 billion next year, with further increases to $13.9 billion in the 2026 to 2027 fiscal year and $20.8 billion in the year after that.
Share this article in your social network