Alberta is facing a challenging financial year, and the second-quarter update shows the deficit remained unchanged. Budget 2025 estimated a $5.2-billion deficit for 2025-26. In the first-quarter update, that forecast increased to $6.5 billion. The second-quarter update shows the deficit is relatively unchanged at $6.4 billion.

Even with challenges, there is light on the horizon. Alberta has seen solid job growth this year, and inflation remains under control. The new energy agreement between the governments of Alberta and Canada will increase investment certainty, attract opportunity and strengthen the Canadian economy. Alberta's government is also investing in public projects like schools, roads and other infrastructure - and continuing to support what Albertans care about most, including health care and education.

"This has been a tough year for everyone. That is why our government remains focused on controlled spending. No matter the fiscal challenges, we will continue investing in families and the services they rely on." Nate Horner, President of Treasury Board and Minister of Finance

The biggest factor contributing to Alberta's deficit is a 30 per cent decline in natural resource revenue from 2024-25. Non-renewable resource revenue is forecast at $15.4 billion in 2025-26, down from its peak of $25.2 billion in 2022-23. Oil prices are projected at US$61.50 per barrel and are expected to remain low throughout the fiscal year due to ongoing weakness in global markets.

Alberta's economy is facing several pressures. The population has passed five million and is growing at the fastest rate nationwide. This growth has added pressure to the labour market, leading to higher unemployment among young Albertans. Manufacturing and agriculture are struggling with tariffs and trade uncertainty. Many businesses are responding to these conditions by delaying hiring until the economy becomes more stable.

In Q2, the government also secured new labour agreements with several large public sector unions, including those representing Alberta's registered nurses and civil servants. About $881 million from the contingency has been allocated for compensation increases for public servants.

While these are challenging times, Alberta's growing workforce, strategic investments and resilient businesses show the province is well-positioned to navigate economic uncertainty and weather any financial storm.

Key facts:

*Alberta's total revenue for 2025-26 is forecast at $73 billion, down $1.2 billion from Budget 2025.

*Total expense is forecast at $79.4 billion, up $52 million from budget.

*The price of oil is forecast at US$61.50 per barrel, down US$6.50 from the budget estimate of US$68 per barrel.

-The price of oil has decreased about US$28 per barrel since 2022-23, when the price of oil averaged more than US$89 per barrel.

*The 2025-26 Heritage Savings Trust Fund second-quarter report notes that the value of the Alberta Heritage Savings Trust Fund is forecast at $31.5 billion as of Sept. 30.

-The fund earned $770 million in net investment income over the second quarter.