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Alberta Campaign Roundup – Day 15

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From the Alberta Institute

Campaign Roundup – Day 15:

  • We’re halfway through the election campaign now! If you’re enjoying our daily campaign roundups, please consider making a one-off donation or signing up as a supporter of the Alberta Institute for just $10 a month so that we can keep you updated.
  • Polls continue to swing back and forth, with new polling from Janet Brown showing the UCP ahead by 51% to 40% province-wide. Crucially, her poll also shows the UCP leading in the key battleground of Calgary by 51% to 39%.
  • The weekend’s hot, dry conditions brought more wildfires and more evacuation orders. There are now almost 20,000 people who have been forced to flee their homes. New evacuation orders were issued for Rainbow Lake, parts of Leduc County, and Sturgeon Lake Cree Nation.
  • Rachel Notley clarified her position on ā€œsafe supplyā€, coming out in support of the programs that provide pharmaceutical replacements for opioids, but called claims that her party wants to provide hard drugs ā€œutterly ridiculousā€.
  • Rachel Notley made an announcement on her Twitter feed, promising to invest in the arts. The NDP, if elected, promised to provide 50% more funding for the Alberta Foundation for the Arts, an Arts Capital Grants Program, and a Live Entertainment Advisory Council.
  • The NDP also held a press conference promising to eliminate the small business tax (from its current 2% rate). She also promised that, if elected, her party would not raise personal income taxes, nor would they go down the road of a PST.
  • The UCP held a press conference announcing new measures to deal with the mental health and addiction crisis. If re-elected, the UCP would draft and pass the Compassionate Intervention Act, which would allow a family member, doctor, psychologist, or police officer to petition a judge to issue a treatment order.
  • Danielle Smith said that providing more drugs to people is not a way to address public safety, nor is it a compassionate way to treat people suffering from addiction. Instead, she promised to build a series of five mental wellness centres, each with 75 beds, as well as add 700 new addiction beds at 11 existing treatment centres.
  • Brian Jean, UCP Candidate for Fort McMurray – Lac La Biche, reminded Albertans of the anti-energy positions of some NDP candidates. He also filmed a video about Danielle Smith’s strong opposition to Justin Trudeau’s anti-energy policies and Rachel Notley’s silence.

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Alberta

Low oil prices could have big consequences for Alberta’s finances

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From the Fraser Institute

By Tegan Hill

Amid the tariff war, the price of West Texas Intermediate oil—a common benchmark—recently dropped belowĀ US$60 per barrel. Given every $1 drop in oil prices is an estimatedĀ $750 millionĀ hit to provincial revenues, if oil prices remain low for long, there could be big implications for Alberta’s budget.

The Smith government already projects aĀ $5.2 billionĀ budget deficit in 2025/26 with continued deficits over the following two years. This year’s deficit is based on oil prices averaging US$68.00 per barrel. While the budget does include a $4 billion ā€œcontingencyā€ for unforeseen events, given the economic and fiscal impact of Trump’s tariffs, it could quickly be eaten up.

Budget deficits come with costs for Albertans, who will already pay a projected $600 each in provincial government debt interest in 2025/26. That’s money that could have gone towards health care and education, or even tax relief.

Unfortunately, this is all part of the resource revenueĀ rollercoasterĀ that’s are all too familiar to Albertans.

Resource revenue (including oil and gas royalties) is inherently volatile. In the last 10 years alone, it has been as high asĀ $25.2 billionĀ in 2022/23 and as low asĀ $2.8 billionĀ in 2015/16. The provincial government typically enjoys budget surpluses—and increases government spending—when oil prices and resource revenue is relatively high, but is thrown into deficits when resource revenues inevitably fall.

Fortunately, the Smith government can mitigate this volatility.

The key is limiting the level of resource revenue included in the budget to a set stable amount. Any resource revenue above that stable amount is automatically saved in a rainy-day fund to be withdrawn to maintain that stable amount in the budget during years of relatively low resource revenue. The logic is simple: save during the good times so you can weather the storm during bad times.

Indeed, if the Smith government had created a rainy-day account in 2023, for example, it could have already built up aĀ sizeableĀ fund to help stabilize the budget when resource revenue declines. While the Smith government has deposited some money in the Heritage Fund in recent years, it has not created a dedicated rainy-day account or introduced a similar mechanism to help stabilize provincial finances.

Limiting the amount of resource revenue in the budget, particularly during times of relatively high resource revenue, also tempers demand for higher spending, which is only fiscally sustainable with permanently high resource revenues. In other words, if the government creates a rainy-day account, spending would become more closely align with stable ongoing levels of revenue.

And it’s not too late. To end the boom-bust cycle and finally help stabilize provincial finances, the Smith government should create aĀ rainy-day account.

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Alberta

Governments in Alberta should spur homebuilding amid population explosion

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From the Fraser Institute

By Tegan Hill and Austin Thompson

In 2024, construction started on 47,827 housing units—the most since 48,336 units in 2007 when population growth was less than half of what it was in 2024.

Alberta has long been viewed as an oasis in Canada’s overheated housing market—a refuge for Canadians priced out of high-cost centres such as Vancouver and Toronto. But the oasis is starting to dry up.Ā House pricesĀ andĀ rentsĀ in the province have spiked by about one-third since the start of the pandemic. According to a recent MaruĀ poll, more than 70 per cent of Calgarians and Edmontonians doubt they will ever be able to afford a home in their city. Which raises the question: how much longer can this go on?

Alberta’s housing affordability problem reflects a simple reality—not enough homes have been built to accommodate the province’s growing population. The result? More Albertans competing for the same homes and rental units, pushing prices higher.

Population growth has always been volatile in Alberta, but the recent surge, fuelled by record levels of immigration, is unprecedented. Alberta has set new population growth records every year since 2022, culminating in the largest-ever increase of 186,704 new residents in 2024—nearly 70 per cent more than the largest pre-pandemic increase in 2013.

Homebuilding has increased, butĀ not enoughĀ to keep pace with the rise in population. In 2024, construction started on 47,827 housing units—the most since 48,336 units in 2007 when population growth was less than half of what it was in 2024.

Moreover, from 1972 to 2019, Alberta added 2.1 new residents (on average) for every housing unit started compared to 3.9 new residents for every housing unit started in 2024. Put differently, today nearly twice as many new residents are potentially competing for each new home compared to historical norms.

While Alberta attracts more Canadians from other provinces than any otherĀ province, federal immigration and residency policies drive Alberta’sĀ population growth. So while the provincial government has little control over its population growth, provincial and municipal governments can affect the pace of homebuilding.

For example, recent provincial amendments to theĀ city chartersĀ in Calgary and Edmonton have helped standardize building codes, which should minimize cost and complexity for builders who operate across different jurisdictions. Municipal zoning reforms inĀ Calgary,Ā EdmontonĀ andĀ Red DeerĀ have made it easier to build higher-density housing, andĀ LethbridgeĀ andĀ Medicine HatĀ may soon follow suit. These changes should make it easier and faster to build homes, helping Alberta maintain some of theĀ least restrictiveĀ building rules and quickest approval timelines in Canada.

There is, however, room for improvement. Policymakers at both the provincial and municipal level should streamline rules for building, reduce regulatory uncertainty and development costs, and shorten timelines for permit approvals. Calgary, for instance, imposesĀ feesĀ on developers to fund a wide array ofĀ public infrastructure—including roads, sewers, libraries, even buses—while Edmonton currently only imposes fees to fund the construction of newĀ firehalls.

It’s difficult to say how long Alberta’s housing affordability woes will endure, but the situation is unlikely to improve unless homebuilding increases, spurred by government policies that facilitate more development.

Tegan Hill

Director, Alberta Policy, Fraser Institute

Austin Thompson

Senior Policy Analyst, Fraser Institute
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