The first two months of 2025 have seen a shift in the global economic context, and governments have been forced to adapt. Last year was about responsibly building the province, this year it’s about confronting new challenges head-on.
Alberta remains one of the fastest-growing provinces in Canada, and that growth continues to put pressure on the services Albertans count on every day. New this year are the ongoing trade conflicts with the U.S., which threaten to put significant downward economic pressure on not just Alberta but the entire global economy.
The fiscal framework introduced in 2023 was meant to keep Alberta’s financial situation in check and the province’s spending within its means. Those guardrails allow for deviation in the event of extraordinary circumstances—and these are extraordinary circumstances.
For the first time in Premier Smith’s tenure, the Government of Alberta is forecasting a $5.2 billion deficit, which will be reduced over the next three years. The deficit results from a doubling of the Government’s fiscal contingency in response to global volatility, as well as a significant increase in government spending while revenue remains stagnant. Almost every department will see an increase in their budget, and spending on new capital projects has increased by more than $1 billion.
Budget 2025 is unchartered waters for a UCP government, but as Minister Horner said in his address, “we are in a difficult time.”
You can find our full analysis of the budget below. For more analysis, or support engaging government on any of the budget announcements, contact your Navigator team or reach out at info@navltd.com.
