Alberta
Alberta government’s fiscal update underscores need for rainy-day account

From the Fraser Institute
By Tegan Hill
According to the Smith government’s recent fiscal update, the government’s $2.9 billion projected budget surplus has increased to a $4.6 budget surplus in 2024/25 mainly due to higher-than-expected resource revenue. But the resource boom that fuels Alberta’s fiscal fortunes could end at any moment and pile more government debt on the backs of Albertans.
Resource revenue, fuelled by commodity prices (including oil and gas), is inherently volatile. For perspective, in just the last decade, the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and accounted for just 6.5 per cent of total government revenue. In contrast, according to the Smith government’s fiscal update, projected resource revenue is $20.3 billion this fiscal year and will account for more than a quarter (26.1 per cent) of total government revenue.
But here’s the problem.
Successive Alberta governments—including the Smith government—have included nearly all resource revenue in the budget. In times of relatively high resource revenue, such as we’re currently experiencing, the government typically enjoys surpluses and, flush with cash, increases spending. But when resource revenues decline, the province’s finances turn to deficits.
The last time this happened Alberta ran nearly uninterrupted deficits from 2008/09 to 2020/21 while the province’s net financial position deteriorated by nearly $95 billion. As a result, Albertans went from paying $58 per person on annual provincial government debt interest costs to nearly $600 per person.
So how can the Smith government avoid the same fate as past Alberta governments who wallowed in red ink when the boom-and-bust cycle inevitably turned to bust?
The answer is simple—save during good times to help avoid deficits during bad times. The provincial government should determine a stable amount of resource revenue to be included in the budget annually and deposit any resource revenue above that amount automatically in a rainy-day account to be withdrawn in years when resource revenue falls below that stable amount.
This wouldn’t be Alberta’s first rainy-day account. In fact, the Alberta Sustainability Fund (ASF), established in 2003, was intended to operate this way. A major problem with the ASF, however, was that it was based in statutory law, which meant the Alberta government could unilaterally change the rules governing the fund. Consequently, the stable amount was routinely increased and by 2007 nearly all resource revenue was used for annual spending. The ASF was eventually drained and eliminated entirely in 2013. This time, the government should make the fund’s rules constitutional, which would help ensure it’s sustained over time.
Put simply, funds in a resurrected ASF will provide stability in the future by mitigating the impact of cyclical declines on the budget over the long term.
In the recent fiscal update, the Alberta government continues to risk relying on relatively high resource revenue to balance the budget. To avoid deficits and truly stabilize provincial finances for the future, the Smith government should reintroduce a rainy-day account.
Tegan Hill
Director, Alberta Policy, Fraser Institute
Alberta
Premier Danielle Smith calls for federal election

Premier Danielle Smith issued the following statement on the swearing in of Canada’s 24th Prime Minister and his new federal cabinet.
“Now that Prime Minister Mark Carney has been officially sworn in, his first item of business should be to call a general election.
“I am extremely concerned that this cabinet includes most of same ministers responsible for the most damaging government policies levelled by Ottawa against Alberta in our over 100-year history. We are gravely concerned that plans to significantly increase the industrial carbon tax will be just as damaging to Alberta’s economy as the consumer carbon tax has been.
“The Prime Minister also has not yet condemned harmful policies such as:
- The proposed emissions cap which continues to threaten our energy sector.
- Bill C-69 which still hampers critical infrastructure projects.
- Failed bail policies which continue to put our communities at risk, undermining the safety and security that Albertans deserve.
- Gun bans that target law-abiding hunters and sport shooters.
- Open border policies which are allowing over two million people per year to enter Canada.
- The plastics ban which puts billions of dollars of investment and thousands of jobs at risk.
- Bill C-59 which bans businesses from communicating about their environmental goals.
- The electric vehicle mandate which calls for 100 percent of new vehicles sold to be electric by 2035.
- The Sustainable Jobs Act, which aims to transition energy workers to a net zero economy as they work to shut down the energy sector.
“Our province has always been a leader in innovation, economic growth, and responsible resource development. We will continue to stand up for our industries, push back against policies that unfairly target Alberta, and fight for a fair deal within Confederation.
“The Prime Minister must put Canada first and call an election immediately to ensure that whoever is leading this country has a four year mandate from all Canadians, especially in light of the ongoing tariff conflict with the U.S.”
Alberta
Highway twinning from Sylvan Lake to Rocky Mountain House among dozens of infrastructure projects beginning in Alberta

Alberta’s government is investing in roads, bridges, and water infrastructure to strengthen the economy and meet the needs of the province’s growing population.
As Alberta’s population continues to grow so does the need for safe, reliable and effective infrastructure to support communities across the province, attract investment and boost economic development. Maintaining and expanding the provincial road and bridge network is vital for growing communities and expanding market access for local industry.
If passed, Budget 2025 would invest more than $8.5 billion for the Ministry of Transportation and Economic Corridors’ three-year Capital Plan, a $333.7-million increase compared with Budget 2024. This total includes more than $4 billion over three years for transportation infrastructure projects to benefit rural communities across the province, as well as $2.1 billion over three years for projects in the Calgary region, and $2 billion for projects in the Edmonton region.
“We are investing in the transportation and water infrastructure our communities need to address rapid growth, promote economic development and support a high quality of life. These investments help ensure our province remains the best place in Canada to live, work and raise a family.”
The total capital investment in this year’s budget includes $2.6 billion for planning, design and construction of major highway and bridge projects. This work will create thousands of jobs across Alberta, improve traffic flow, and support the development of major trade corridors through projects such as twinning Highway 3 and Highway 11, and major improvements to Deerfoot Trail and Highway 881. Capital investment funding also includes more than $186 million over three years for more than 50 engineering projects to address future infrastructure needs as the province continues to grow.
“These investments in Calgary’s roads and bridges are critical to supporting our growing city. Improved infrastructure means safer commutes, better connections for businesses and a stronger foundation for future growth.”
If passed, Budget 2025 would also include a $1.7-billion investment over three years for capital maintenance and renewal, which extends the life of the province’s existing road and bridge network, keeping the highway network safe and helping industry create and maintain well-paying jobs.
“Building and fixing roads and bridges improves the productivity of Alberta’s economy. Budget 2025 continues investing in critical infrastructure using local materials and labour. The ARHCA applauds Alberta’s leadership and commitment to all modes of trade-enabling transportation.”
In addition to improving and maintaining the provincial highway network, Alberta’s government has allocated $3.9 billion for capital grants to municipalities over the next three years. This includes funding for LRT projects in Edmonton and Calgary, as well as $5 million in new funding to support planning work for a new transit solution connecting the Calgary airport terminal with the future Blue Line LRT extension station.
“Investing in infrastructure is critical to establishing a solid foundation for economic growth, sustainability and thriving communities. As our population continues to grow, we must make smart investments in roads, bridges, water and transportation infrastructure to ensure our communities and businesses remain vibrant, connected and ready for the future.”
If passed, targeted investments in Budget 2025 would also support the growth and prosperity of rural communities by providing $126.8 million over three years to municipalities through the Strategic Transportation Infrastructure Program. This program helps smaller municipalities improve critical local transportation infrastructure.
Additionally, ongoing capital grants totalling $519.7 million over three years in water and wastewater infrastructure will ensure Albertans in every community have reliable access to clean drinking water and effective wastewater services.
Finally, Budget 2025 would provide $240.1 million to build and repair water management infrastructure, including dams, spillways, canals and control structures. This investment provides irrigation for the agriculture sector and flood mitigation for Alberta communities.
Budget 2025 is meeting the challenge faced by Alberta with continued investments in education and health, lower taxes for families and a focus on the economy.
Quick Facts
Regional Highlights
North region
- Budget 2025, if passed, invests $1.25 billion over three years in road and bridge construction projects to benefit the North region, including:
- $101 million for Highway 63 twinning, north of Fort McMurray
- $141 million for Highway 881 safety and road improvements
- $87 million for construction of the La Crete bridge
- $69 million for Highway 40 grade widening between Hinton and Grande Cache
- $7 million for the La Loche Connector road – extending Highway 956 from La Loche, Saskatchewan to Fort McMurray
- $4 million for twinning Highway 40 south of Grande Prairie
- $127.5 million for Highway 60 Capital Improvements
Central region
- Budget 2025, if passed, invests $1.4 billion over three years in road and bridge construction projects to benefit the Central region, including:
- $208 million for Highway 11 twinning between Sylvan Lake and Rocky Mountain House
- $98 million for the Vinca Bridge replacement on Highway 38 (near Redwater) as part of work to enhance the high-load corridor
South region
- Budget 2025, if passed, invests $363 million over three years in road and bridge construction projects to benefit the South region, including:
- $106 million for Highway 3 twinning (between Taber and east of Burdett)
- $92 million for the Highway 2 Balzac Interchange Replacement
- $24 million for the Highway 1A upgrade (Stoney First Nation)
- $9 million for the QEII Highway and 40th Avenue interchange ramp (near Airdrie)
Calgary
- Budget 2025, if passed, invests $2.1 billion over three years in road and bridge construction projects, and municipal grants to benefit the Calgary region, including:
- $173.1 million for the Calgary Rivers District and Event Centre
- $484.8 million for Deerfoot Trail upgrades
- $62.4 million for the Springbank Off-stream Reservoir (SR1) project
- $11.9 million for the Bow River Reservoir (Ghost Reservoir Infrastructure Project)
- $100 million for the Calgary Ring Road (West Stoney Trail)
- $8 million for the completion of the Highway 201 Bow River Bridge on the southeast Stoney Trail
- $26.5 million for the completion of the Stoney Trail and Airport Trail interchange
Edmonton
- Budget 2025, if passed, invests $2 billion over three years in road and bridge construction projects to benefit the Edmonton region, including:
- $31.9 million for the Ray Gibbon Drive expansion
- $31 million for the Terwillegar Drive widening from Rabbit Hill Road to Windermere Boulevard
- $52.7 million for the Terwillegar Drive Expansion improvements to the interchange at SW Anthony Henday Drive.
- $20.3 million for Highway 16A and Range Road 20 Safety Improvements
- $17.2 million for Highway 19 twinning
- $40.2 million for the Highway 2 and 65 Avenue Interchange in Leduc
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