Budget 2026: Winners, Cuts, and the Oil Price Wildcard
Biggest Winners
In a legislative session defined by a projected $9.4 billion deficit, Budget 2026 is being promoted as a disciplined plan that’s “focused on what matters”. Despite deteriorating fiscal conditions, the United Conservative government has opted to increase spending in a select number of politically critical sectors, offering a clear indication of where it intends to focus its message heading toward the scheduled 2027 provincial election.
Health care is at the core of that strategy.
Total provincial health spending is projected to reach $34.4 billion, with $13.8 billion dedicated to operating and expanding hospital and surgical systems, representing an increase of roughly $1.7 billion year over year. The funding is intended to support staffing, emergency services, diagnostics, and surgical capacity while addressing pressures on Alberta’s acute-care system.
The government has also increased health care capital spending. Budget 2026 includes $4.9 billion for health infrastructure, an increase of $1.3 billion compared with last year. The Red Deer Regional Hospital redevelopment, one of the province’s largest health infrastructure projects, will receive more than $1 billion over three years.
While the government has promised new hospital capacity, including three new inpatient towers in Edmonton and Calgary that could add more than 1,000 beds, Budget 2026 currently includes planning funding rather than construction funding. For example, the Grey Nuns and Misericordia hospital towers in Edmonton will receive $7.22 million over two years for planning, with construction timelines to be determined in future budgets.
The distinction matters. Planning funds contribute to a project’s scope and design, but they do not translate into new beds for patients in the short term. University of Calgary Health Economist Dr. Braden Manns warned that the promised expansions are likely “many years away” from completion, even as hospitals struggle with immediate capacity constraints.
Education is another clear winner in Budget 2026. The province is increasing funding for the Ministry of Education and Childcare by over $1 billion for 2026-27, including $10.8 billion in operational funding to put more teachers and Education Assistants in classrooms and ease pressure, and allocating more than $500 million for capital investments in school facilities.
Together, these investments provide a window into the UCP’s priorities as it approaches the next election. Health care, school capacity, and infrastructure expansions in areas where the government can point to concrete action for voters experiencing the effects of rapid population growth.
On the Chopping Block
While some ministries are receiving substantial increases, others are operating under far tighter fiscal constraints. Budget 2026 reflects a government attempting to address capacity pressures in core services with reductions or delayed investments in other areas.
Several ministries see modest but notable spending reductions, including Energy and Minerals, where an overall decrease of $133 million reflects a $180 million reprofiling of capital grants in the Alberta Petrochemical Incentive Program and Carbon Capture and Storage Program.
Arts, Culture, and Status of Women face reductions of $27 million, with cuts to community and voluntary sector programming. While relatively small within the context of a broader provincial budget, these reductions are politically sensitive given that they affect community organizations and cultural institutions operating across the province.
The Ministry of Agriculture and Irrigation is also seeing adjustments, with total operating expenses decreasing by $21 million in 2026-27. Of note, there is a reduction of $4 million in rural programming and agricultural societies, a network of rural organizations that play a central role in community events, fairs, and local economic development.
These changes carry political implications.
Agricultural societies are deeply embedded within rural Alberta, areas that form the electoral backbone of the United Conservative Party. Reductions in support to these organizations will not dominate headlines, but they resonate strongly in local communities that elect UCP MLAs by large majorities and expect government support.
Beyond the political optics, the reductions also reshape the strategic environment for organizations operating in these sectors. In periods of fiscal constraint, ministries become more selective about funding decisions. That makes targeted government relations strategies increasingly important for stakeholders seeking support. Demonstrating alignment with government priorities becomes critical when discretionary spending is limited.
However, for the opposition, these reductions are political opportunities.
NDP leader Naheed Nenshi is likely to focus attention on sectors experiencing cuts to reinforce a broader narrative around government priorities. Community programming, cultural organizations, and agricultural societies provide tangible examples that the opposition can use to argue the UCP is making painful trade-offs while running a large deficit.
In this sense, the ministries facing reductions may be forced into a disproportionately important role in the political debate around the budget, even if their overall spending represents a relatively small portion of provincial expenditures.
Higher Property Taxes
Budget 2026 also delivers a politically sensitive hit that will show up where many voters will feel it most: property tax bills.
The province is increasing its education property tax requisition to just under $3.6 billion, up from $3.1 billion in 2025. Because the requisition is tied to property values, Calgary is forced to shoulder a disproportionately large share as a result of higher property assessments. Provincial officials have pegged the impact at an average increase of about $340 per Calgary homeowner this year compared to just over $150 for Edmonton homeowners.
Mayor Jeromy Farkas has framed this hike as “over-taxation” without commensurate services and has gone a step further by floating the idea of a standalone plebiscite asking Calgarians whether the city is getting a “fair deal” from the province. Elections Calgary’s returning officer Kate Martin has estimated a standalone vote could cost around $12 million, require six months to organize, or be deferred to the 2029 municipal election.
Even if the plebiscite never materializes, the political risk for the UCP remains. A budget designed to focus on schools and health care could be defined locally by the perception that Calgary, the main battlefield of Alberta elections, is paying more than its fair share when affordability is already strained. For the 12 UCP MLAs in Calgary, including eight cabinet ministers and the Speaker, this will mean contentious meetings and correspondence with constituents who didn’t expect a tax increase to come from a conservative government.
An Unstable WTI
While investments, cuts, and revenue enhancements in Budget 2026 are already generating political debate, the fundamental economic assumptions underpinning the province’s fiscal outlook may prove even more consequential.
Budget 2026 is built around a forecast that West Texas Intermediate (WTI) crude will average US$60.60 per barrel during the 2026-27 fiscal year. That baseline assumption reflects the government’s long-standing approach of using conservative oil projections in its fiscal planning and how it landed at the projected $9.4 billion deficit.
Yet within days of the Budget 2026 being tabled, global events began to overturn that assumption.
Joint American and Israeli strikes on Iran and retaliatory actions across the region have injected extreme volatility in global energy markets. Concerns about disruptions to shipping through the Strait of Hormuz, a strategic chokepoint through which roughly one-fifth of the world’s oil supply moves, have caused the WTI to spike.
WTI, which began the year near US$57 per barrel, quickly surged into the low $70 range, climbing more than 8 per cent in a single day as markets reacted to the geopolitical shock. As of the time of writing, the WTI is sitting at US$98.86.
For Alberta’s finances, those movements carry significant consequences. The province remains highly sensitive to changes in oil prices because of its reliance on energy royalties. Government estimates suggest every $1 increase in the price of oil generates roughly $750 million in additional annual revenue.
Finance Minister Nate Horner has defended the government’s conservative assumptions, arguing that budgets should err on the side of caution rather than rely on optimistic projections. He added that with the current fiscal year ending on March 31, most immediate gains would affect the final weeks of the outgoing fiscal year, potentially reducing the $4.1-billion deficit projected for 2025-26 rather than the larger deficit forecast for next year.
The long-term trajectory of Budget 2026 may depend less on spending decisions made in Edmonton than on developments unfolding in global energy markets. If geopolitical tensions continue disrupting energy supplies, Alberta could find itself with billions in unexpected revenue and renewed calls to revisit spending reductions included in the budget.