As of late Tuesday morning, Alberta’s projected deficit for the incoming budget was — theoretically — sitting at $1.1 billion.

If that came to pass, it would be a far cry from the $9.4-billion in red ink Finance Minister Nate Horner was forecasting just two weeks ago when he released Alberta’s new fiscal blueprint.

That ugly deficit outlook for the budget year that starts April 1 was predicated, in part, on the price of West Texas Intermediate (WTI) crude averaging US$60.50 a barrel.

Yet, based on oil futures at $72.60 a barrel at midday Tuesday, University of Calgary economist Trevor Tombe calculates that if that price held for the upcoming fiscal year, it would shrink the deficit by more than $8 billion.

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And with WTI crude closing at US$87.25 a barrel on Wednesday, Alberta’s deficit would suddenly turn to a river of black ink if oil prices averaged that level during 2026-27.

“We do have a volatile budget and resource revenues are the key driver of it, but going forward it’s going to get even worse,” Tombe said Tuesday during an address at the U of C’s School of Public Policy to discuss Alberta’s fiscal situation.

“We’ve talked about a royalty roller-coaster before, but we haven’t seen anything yet.”

Indeed, global oil prices have bounced up and down like a pogo-stick in the past week, topping $119 a barrel at one point Monday before tumbling by more than $24 to close the day above $94.

The variability is underscored by new forecasts warning oil could potentially reach $200 a barrel if the war in the Middle East drags on........

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