Next month, amid weak oil prices and uncertainty fuelled by recent developments in Venezuela, which could depress prices further, the Smith government will table its 2026 budget. Albertans should brace themselves; every $1 drop in oil prices is a $750 million hit to the Alberta government’s bottom line, and the outlook isn’t bright.

Due in large part to factors outside of the provincial government’s control (global supply and demand, geopolitical instability, policy changes in other countries, etc.), resource revenue (e.g. oil and gas royalties collected by the Alberta government) is inherently volatile.

For perspective, just a few years ago in 2022-23, oil prices were US$89.69 per barrel, resource revenue was $25.2 billion and the Alberta government enjoyed an $11.5-billion budget surplus. But after a few years of relatively high resource revenue and budget surpluses, in 2025-26 the government projects oil prices will average US$61.50 per barrel, resource revenue will be $15.4 billion and the government will incur a $6.5-billion budget deficit. And again, the outlook moving forward is bleak. Deloitte forecasts oil prices will........

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