Alberta
Alberta and B.C. budgets represent two different approaches to government finances

From the Fraser Institute
By Grady Munro and Tegan Hill
” for every $1 of additional revenue enjoyed by both provinces, the Eby government increased spending by more than $6 compared to 79 cents for the Smith government. “
In its recent budget, the Alberta government promised a new approach to provincial finances, with spending restraint and limited debt accumulation. While there’s still work to do, this is a far better approach than the reckless spending and massive debt accumulation of the British Columbia government.
The Smith government projects a $367 million surplus in 2024/25, followed by two more surpluses of $1.4 billion in 2025/26 and $2.6 billion in 2026/27. The government plans to use these surpluses largely to pay down debt, so although provincial net debt (financial assets minus liabilities) is expected to rise slightly in 2024/25 due to increased long-term capital spending (e.g. schools and highways), the debt is projected to decrease 4.1 per cent ($1.7 billion) from 2023/24 to 2026/27.
Alberta’s strong fiscal outlook is largely driven by historically high resource revenues. But while the government plans to increase program spending (total spending minus debt interest costs) nominally over the next three years, spending will grow at a slower rate than population growth and inflation—meaning spending will decline on an inflation-adjusted per-person basis.
The Smith government still must better align spending with stable revenues, but this is an important step in the right direction.
By contrast, B.C.’s 2024 budget projects a $7.9 billion deficit in 2024/25 followed by deficits of $7.8 billion in 2025/26 and $6.3 billion in 2026/27. These deficits, combined with borrowing for capital projects, will drive a projected $55.1 billion (74.7 per cent) increase in provincial net debt from 2023/24 to 2026/27. As a result, the level of net debt projected in 2026/27 ($128.8 billion) is nearly triple the level recorded in 2019/20 ($46.9 billion).
These deficits are due to a substantial increase in provincial spending by the Eby government. Indeed, similar to Alberta, B.C. has recently enjoyed an unexpected surge in revenues, but unlike the Smith government, the Eby government has shown no spending restraint.
From 2023/24 to 2025/26, revenues in B.C. will be a projected $2.0 billion higher than the government projected in last year’s budget, yet the plan for spending over that same period increased by $13.2 billion. For comparison, the Smith government also increased spending in these years relative to its 2023 budget, but did so by $2.1 billion less than the increase in revenues.
In other words, for every $1 of additional revenue enjoyed by both provinces, the Eby government increased spending by more than $6 compared to 79 cents for the Smith government.
The consequences of B.C.’s approach are clear. By spending far outside its means, the Eby government will saddle future generations of British Columbians with tens of billions more in debt that must be financed through taxes. For perspective, debt interest payments will nearly cost a projected $1,000 per British Columbian by 2026/27—that’s taxpayer money no longer available for programs or services. Moreover, continued deficits weaken the government’s ability to deal with future challenges (such as an economic downturn) without taking on more debt and driving up interest costs.
The Alberta and B.C. budgets provide examples of two different approaches to government finances. While there’s more to be done, Alberta is moving in the right direction to help prevent debt accumulation. On the other hand, B.C. is massively increasing spending and debt, to the detriment of British Columbians now and in the future.
Authors:
Alberta
The beauty of economic corridors: Inside Alberta’s work to link products with new markets

From the Canadian Energy Centre
Q&A with Devin Dreeshen, Minister of Transport and Economic Corridors
CEC: How have recent developments impacted Alberta’s ability to expand trade routes and access new markets for energy and natural resources?
Dreeshen: With the U.S. trade dispute going on right now, it’s great to see that other provinces and the federal government are taking an interest in our east, west and northern trade routes, something that we in Alberta have been advocating for a long time.
We signed agreements with Saskatchewan and Manitoba to have an economic corridor to stretch across the prairies, as well as a recent agreement with the Northwest Territories to go north. With the leadership of Premier Danielle Smith, she’s been working on a BC, prairie and three northern territories economic corridor agreement with pretty much the entire western and northern block of Canada.
There has been a tremendous amount of work trying to get Alberta products to market and to make sure we can build big projects in Canada again.
CEC: Which infrastructure projects, whether pipeline, rail or port expansions, do you see as the most viable for improving Alberta’s global market access?
Dreeshen: We look at everything. Obviously, pipelines are the safest way to transport oil and gas, but also rail is part of the mix of getting over four million barrels per day to markets around the world.
The beauty of economic corridors is that it’s a swath of land that can have any type of utility in it, whether it be a roadway, railway, pipeline or a utility line. When you have all the environmental permits that are approved in a timely manner, and you have that designated swath of land, it politically de-risks any type of project.
CEC: A key focus of your ministry has been expanding trade corridors, including an agreement with Saskatchewan and Manitoba to explore access to Hudson’s Bay. Is there any interest from industry in developing this corridor further?
Dreeshen: There’s been lots of talk [about] Hudson Bay, a trade corridor with rail and port access. We’ve seen some improvements to go to Churchill, but also an interest in the Nelson River.
We’re starting to see more confidence in the private sector and industry wanting to build these projects. It’s great that governments can get together and work on a common goal to build things here in Canada.
CEC: What is your vision for Alberta’s future as a leader in global trade, and how do economic corridors fit into that strategy?
Dreeshen: Premier Smith has talked about C-69 being repealed by the federal government [and] the reversal of the West Coast tanker ban, which targets Alberta energy going west out of the Pacific.
There’s a lot of work that needs to be done on the federal side. Alberta has been doing a lot of the heavy lifting when it comes to economic corridors.
We’ve asked the federal government if they could develop an economic corridor agency. We want to make sure that the federal government can come to the table, work with provinces [and] work with First Nations across this country to make sure that we can see these projects being built again here in Canada.
2025 Federal Election
Next federal government should recognize Alberta’s important role in the federation

From the Fraser Institute
By Tegan Hill
With the tariff war continuing and the federal election underway, Canadians should understand what the last federal government seemingly did not—a strong Alberta makes for a stronger Canada.
And yet, current federal policies disproportionately and negatively impact the province. The list includes Bill C-69 (which imposes complex, uncertain and onerous review requirements on major energy projects), Bill C-48 (which bans large oil tankers off British Columbia’s northern coast and limits access to Asian markets), an arbitrary cap on oil and gas emissions, numerous other “net-zero” targets, and so on.
Meanwhile, Albertans contribute significantly more to federal revenues and national programs than they receive back in spending on transfers and programs including the Canada Pension Plan (CPP) because Alberta has relatively high rates of employment, higher average incomes and a younger population.
For instance, since 1976 Alberta’s employment rate (the number of employed people as a share of the population 15 years of age and over) has averaged 67.4 per cent compared to 59.7 per cent in the rest of Canada, and annual market income (including employment and investment income) has exceeded that in the other provinces by $10,918 (on average).
As a result, Alberta’s total net contribution to federal finances (total federal taxes and payments paid by Albertans minus federal money spent or transferred to Albertans) was $244.6 billion from 2007 to 2022—more than five times as much as the net contribution from British Columbians or Ontarians. That’s a massive outsized contribution given Alberta’s population, which is smaller than B.C. and much smaller than Ontario.
Albertans’ net contribution to the CPP is particularly significant. From 1981 to 2022, Alberta workers contributed 14.4 per cent (on average) of total CPP payments paid to retirees in Canada while retirees in the province received only 10.0 per cent of the payments. Albertans made a cumulative net contribution to the CPP (the difference between total CPP contributions made by Albertans and CPP benefits paid to retirees in Alberta) of $53.6 billion over the period—approximately six times greater than the net contribution of B.C., the only other net contributing province to the CPP. Indeed, only two of the nine provinces that participate in the CPP contribute more in payroll taxes to the program than their residents receive back in benefits.
So what would happen if Alberta withdrew from the CPP?
For starters, the basic CPP contribution rate of 9.9 per cent (typically deducted from our paycheques) for Canadians outside Alberta (excluding Quebec) would have to increase for the program to remain sustainable. For a new standalone plan in Alberta, the rate would likely be lower, with estimates ranging from 5.85 per cent to 8.2 per cent. In other words, based on these estimates, if Alberta withdrew from the CPP, Alberta workers could receive the same retirement benefits but at a lower cost (i.e. lower payroll tax) than other Canadians while the payroll tax would have to increase for the rest of the country while the benefits remained the same.
Finally, despite any claims to the contrary, according to Statistics Canada, Alberta’s demographic advantage, which fuels its outsized contribution to the CPP, will only widen in the years ahead. Alberta will likely maintain relatively high employment rates and continue to welcome workers from across Canada and around the world. And considering Alberta recorded the highest average inflation-adjusted economic growth in Canada since 1981, with Albertans’ inflation-adjusted market income exceeding the average of the other provinces every year since 1971, Albertans will likely continue to pay an outsized portion for the CPP. Of course, the idea for Alberta to withdraw from the CPP and create its own provincial plan isn’t new. In 2001, several notable public figures, including Stephen Harper, wrote the famous Alberta “firewall” letter suggesting the province should take control of its future after being marginalized by the federal government.
The next federal government—whoever that may be—should understand Alberta’s crucial role in the federation. For a stronger Canada, especially during uncertain times, Ottawa should support a strong Alberta including its energy industry.
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