Alberta’s Finance Minister Nate Horner tabled his first budget, which includes more than $70 billion in spending and a surplus of $367 million. Restraint and austerity are the key words that define this budget. Premier Danielle Smith’s goal of keeping spending increases below 6.2% (this figure is based on inflation combined with population growth) has been met. Health Care and Education are the big winners in this budget.
Fiscal Projections/Economic Outlook:
The province plans to spend $73.2 billion this fiscal year – a 3.9% increase from last year. It is estimated that resource revenues will contribute approximately 25% to Alberta’s overall revenue. A large part of this revenue is based on the government’s forecast of West Texas intermediate crude at $74 USD a barrel. The current price is $78 USD a barrel. However, each dollar drop in the price of oil will account for a $600 million decrease in revenues. The government will put $2 billion towards the Heritage Savings Trust Fund for a total of $25 billion.
While this is a balanced budget, the province is in a negative cash position due to accounting adjustments and borrowing needs (even though expenses are lower than revenues). The provincial debt is now at $78.4 billion.
Tourism:
- Travel Alberta received an additional $8 million bringing their budget to $80 million for 2024/25.
- The Tourism Levy brought in $118 million in revenue. This means Travel Alberta received about 68% of the revenue generated.
- Creation of a dedicated immigration stream for Tourism & Hospitality.
- The deployment of Travel Alberta’s long-term Tourism Strategy: Higher Ground.
- Increased investment in roads and air access will help bring travelers in and get them around safely.
- The province has created a $10 million incentive to attract skilled workers both internationally and domestically through the Alberta is Calling campaign.
Wildfire preparation and emergency management:
- $151 million in operating expenses to strengthen wildfire response.
- $55 million in capital funding to upgrade facilities and equipment that support wildfire operations.
- $251 million in capital funding over three years for flood and drought mitigation projects.
- $418 million in capital funding over three years to expand water supply.
- $147 million for repairing and upgrading water infrastructure.
- $75 million over three years for the Renewed Flood and Drought Mitigation program.
Safer communities:
- $49 million in capital funding over three years to provide sheriffs and first responders with the equipment they need to protect Albertans.
- $10 million to support 100 police officers in high-crime areas in Calgary and Edmonton.
This budget delivers on many of Smith’s key commitments, however she is delaying the promise on personal income tax relief until 2026/2027, starting in 2026 and rolling out over two years. Smith is prioritizing fiscal restraint, robust investments in the Heritage Fund, implementation of a long-term strategic plan with balanced budgets every year. Approximately 25% of the budget is dependent on energy royalties.
These investments highlight the provincial government’s continued commitment to the tourism & hospitality sector while showing restraint with Albertans tax dollars. We will continue to urge the government to allocate the full amount of the Tourism Levy to Travel Alberta to ensure we meet the government’s goal of doubling tourism revenues by 2035.
For more information, please contact:
Laurie Chandler
Vice President, Public Affairs