As looming U.S. tariffs cast a shadow over the province’s fiscal future as the government prepares to deliver the 2025 budget next week, one Alberta economist says the province could see a surplus.
Finance Minister Nate Horner in delivering November’s fiscal update has warned the province had to “move forward cautiously and spend wisely” despite projecting a $4.6-billion surplus, warning of turbulent times ahead.
And even though a 10-per-cent tariff on oil and gas “could potentially cost the government between $4-5 billion, depending on how long those tariffs last,” economist Trevor Tombe told CTV News Edmonton, it could make Alberta oil more valuable while weakening the Canadian dollar.
“Every time the exchange rate falls by even one cent, it’s as though the price of oil is increased by $1 a barrel,” said Tombe, a professor at the University of Calgary’s Department of Economics and the Director of Fiscal and Economic Policy at The School of Public Policy.
“That might not sound like a lot, but it has huge implications for the government’s bottom line.”
Every one-dollar change in the price of oil results in a $600-million swing in revenues for Alberta, leading Tombe to believe “it is entirely possible that the budget that we see will have a surplus.”
Significant public sectors are seeking investment from the provincial government.
Chris Galloway, the head of Edmonton-based Friends of Medicare, says instead of prioritizing health care access and employees, the province is spending too much on overhauling the system.
“The estimate is $85 million over a couple of years,” Galloway told CTV News Edmonton. “Does that include the new logos and new signage on every building? Does that include severance we’ve been paying?”
Galloway said the provincial government “need(s) to ensure we have the beds that we need for our growing population.”
“We have not done that. We are behind,” he said. “The second piece is actually having the workforce to keep those beds open, to staff them.”
And while the president of Alberta’s largest teachers union welcomes the recent accelerated funding for 11 new schools this year, he says more money per student is needed
Jason Schilling, the head of the Alberta Teachers' Association, told CTV News Edmonton the province’s schools are “still the least-funded” in Canada.
“If anything, that gap … we’ve only fallen further behind,” Schilling said.
Budget 2025 is slated to be presented by Horner on Thursday at the Alberta legislature.
