Premier Danielle Smith’s first budget adds health and education spending and forecasts a $2.4 billion surplus

Government of Alberta

Published

3 years ago

12 minute read

Budget 2023 forecasts a surplus of $2.4 billion in 2023-24 and reflects the government decisions to invest in Alberta’s future and provide security for Alberta families and communities.

“Fiscal responsibility matters. It’s been key to achieving our strong fiscal standing and will be essential for sustainable program delivery in the future. In Budget 2023, we continue our commitment to paying down debt all while continuing to position our economy for growth and invest in the top priorities of Albertans.”

Travis Toews, President of Treasury Board and Minister of Finance

Growing jobs and the economy

Budget 2023 advances the province’s already successful Alberta at Work initiative, investing a further $176 million in 2025-26 to help Albertans build their skills and find jobs, and assisting employers in their search for workers in existing and emerging sectors.

A $111-million increase over three years will add seats to expand enrolment in areas with the highest student demand, including non-trade construction, energy, technology and business. Alberta’s government is committed to removing barriers in order to attract highliy skilled professionals and job-creating entrepreneurs to Alberta.

Investments in aviation and aerospace, agri-food manufacturing and $24.5 million this fiscal year to the Alberta Technology and Innovation Strategy will enhance emerging and innovative technologies, drive economic diversification and attract even more venture capital investments to build on successive record-breaking years. A $54-million per year increase in funding for the Alberta Petrochemicals Incentive Program starting in 2025-26 will support Air Products’ clean hydrogen facility – and continue to make Alberta a global leader in petrochemical production, bring long-term investments and create thousands of construction jobs.

Transforming health care to meet Albertans’ needs

Alberta’s government is setting a new record for spending in health care this year by committing an additional $965 million in operating expense in 2023-24 for the Ministry of Health to continue to build a stronger health-care system for Albertans. This funding will ensure the government can take the urgent action needed to improve ambulance response times, decrease emergency room wait times, reduce wait times for surgeries and attract more front-line health workers to deliver the care patients expect and deserve.

Budget 2023 includes $158 million this year to attract, recruit and train more doctors and nurses to work across the province, with a focus on family physicians for rural areas. Alberta’s primary health-care system is being strengthened and modernized with a record $2 billion over three years. Another $196 million over three years will strengthen emergency medical services and $3.1 billion over three years will modernize and expand health facilities across Alberta, including the Red Deer Regional Hospital and expanding capacity for operating rooms in 15 communities to complete more of the surgeries Albertans are waiting for. An additional $529 million in capital maintenance and renewal funding will be used to keep facilities operational and a further $732 million in self-financed investment will add to health infrastructure.

Supporting Albertans, students and families

With $2.3 billion in affordability measures in 2023-24, $1.5 billion in 2024-25 and another $1.8 billion in 2025-26, Alberta’s government is keeping more money in the pockets of Albertans and continues to provide a helping hand to those in need. New relief measures will save post-secondary students about $18 million each year with lower interest rates for student loans. Adoptive families will have access to more subsidies and tax breaks to make adoption more feasible. Workers in the social services sector will see their wages increased by 10 per cent, so they can continue to provide compassionate services to people with complex needs, those experiencing homelessness or family violence. Albertans will also receive a larger tax credit when they donate to their favourite charities to lend a helping hand.

An increase of $1.8 billion for education will help Alberta’s young people succeed and thrive in smaller classes. This increase will support the hiring of up to 3,000 education staff, including teachers, educational assistants, bus drivers and school support staff to give students the focused time and attention they need to succeed in their studies.

The government is also investing $59.3 million in 2023-24 to create thousands more licensed child-care spaces as part of opening a total of 68,700 new spaces by the end of March 2023, increasing access and choice so parents can go to school, work and participate in the economy. Affordability grants to child-care operators and subsidies for parents will further lower the cost of child care, with the Alberta federal-provincial child-care agreement already reducing fees by an average of 50 per cent in 2022 for young children.

Keeping Albertans and communities safe

All Albertans, families and children have the right to safety and security in their homes, at school, at work and in their communities, no matter where they live.

Budget 2023 keeps communities safe by increasing collaboration between first responders and community partners and increasing access for vulnerable populations to recovery-oriented mental health and addiction supports and services.

$12.5 million in 2023-24 will support the expansion of therapeutic living units within provincial correctional facilities to help inmates access recovery-oriented treatment and recovery programs. This is a joint investment between Mental Health and Addiction and Public Safety and Emergency Services.
$65 million over the next three years will strengthen First Nations policing to address the unique needs of their communities and members. This will secure new policing positions and the creation of another First Nations police service in addition to the Lakeshore Regional Police Service, the Blood Tribe Police Service and Tsuut’ina Nation Police Service.
$20 million over three years is committed to combat human trafficking and ensure necessary resources are provided to survivors and victims.

The province will review options for delivering policing services with the objective of improving the safety and security of Albertans and their property.

Committing to responsible fiscal management

Budget 2023 secures Alberta’s future by staying true to responsible fiscal management and spending hard-earned tax dollars wisely to support Albertans today and tomorrow.

A new fiscal framework would require all future Alberta governments to balance their annual budgets, with certain exceptions, and use any surpluses to first pay down debt and save for the future before investing in one-time initiatives.

Taxpayer-supported debt is being reduced by $14.8 billion between 2021-22 and 2023-24, and the Alberta Heritage Savings Trust Fund is growing by $5.7 billion between 2021-22 and 2025-26. This will bring taxpayer-supported debt to $78.3 billion at the end of 2023-24, and saves Albertans estimated $260 million in this fiscal year and $551 million in 2023-24.

Mandating balanced budgets and tying operating expense increases to population growth and inflation would help control spending to prevent what could be temporarily high resource revenue being used to increase spending in an unsustainable way. Spending decisions instead would be focused on not only meeting the needs and priorities of Albertans but also on continuing to drive change, innovation and improvement of vital services and programs.

Revenue

In 2023-24, total revenue is estimated to be $70.7 billion, which is $5.4 billion lower than the forecast for 2022-23. Commodity prices are expected to soften due to fears of a looming global recession, while investment income is expected to recover well after dropping in 2022-23.
- Revenue is expected to remain above $70 billion in following years. The revenue forecast for 2024-25 is $71.7 billion and for 2025-26 is $72.6 billion.
- In 2023-24, corporate income tax revenue is estimated at $5.9 billion, down 7.8 per cent from 2022-23, largely due to declining commodity prices.
- Non-renewable resource revenue is estimated to be $18.4 billion in 2023-24, down from the highest-ever resource revenue of $27.5 billion forecast in 2022-23.

Expense

Total expense in 2023-24 is $68.3 billion, which is $2.6 billion more than the forecast for 2022-23.
- Total expense is expected to be $69.7 billion in 2024-25 and $71.2 billion in 2025-26.

Surplus

A surplus of $2.4 billion is forecast for 2023-24 compared with $10.4 billion in 2022-23.
- Surpluses of $2 billion and $1.4 billion are forecast for 2024-25 and 2025-26, respectively.

Economic outlook

In 2022, real gross domestic product (GDP) rose by an estimated 4.8 per cent, which is lower than the budget forecast of 5.4 per cent. The softer growth reflects the impact of higher interest rates and prices on consumer spending and residential investment. Even so, real GDP fully recovered from the COVID-19 downturn and surpassed the 2014 peak in 2022.
In 2023, real GDP is expected to grow by 2.8 per cent, up slightly from the 2.7 per cent growth forecast at mid-year.

Energy and economic assumptions, 2023-24

West Texas Intermediate oil (USD/bbl) $79.00
Western Canadian Select @ Hardisty (CND/bbl) $78.00
Light-heavy differential (USD/bbl) $19.50
Natural gas (CND/GJ) $4.10
Convention crude production (000s barrels/day) 497
Raw bitumen production (000s barrels/day) 3,345
Canadian dollar exchange rate (USD/CDN) $76.20
Interest rate (10-year Canada bonds, per cent) 3.60

Budget 2023 secures Alberta’s bright future by transforming the health-care system to meet people’s needs, supporting Albertans with the high cost of living, keeping our communities safe and driving the economy with more jobs, quality education and continued diversification.

Government of Alberta

This is a news release from the Government of Alberta.

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Carney forces Alberta to pay a steep price for the West Coast Pipeline MOU

Published on November 27, 2025

Todayville

From the Fraser Institute

By Kenneth P. Green

The stiffer carbon tax will make Alberta’s oil sector more expensive and thus less competitive at a time when many analysts expect a surge in oil production. The costs of mandated carbon capture will similarly increase costs in the oilsands and make the province less cost competitive.

As we enter the final days of 2025, a “deal” has been struck between Carney government and the Alberta government over the province’s ability to produce and interprovincially transport its massive oil reserves (the world’s 4th-largest). The agreement is a step forward and likely a net positive for Alberta and its citizens. However, it’s not a second- or even third-best option, but rather a fourth-best option.

The agreement is deeply rooted in the development of a particular technology—the Pathways carbon capture, utilization and storage (CCUS) project, in exchange for relief from the counterproductive regulations and rules put in place by the Trudeau government. That relief, however, is attached to a requirement that Alberta commit to significant spending and support for Ottawa’s activist industrial policies. Also, on the critical issue of a new pipeline from Alberta to British Columbia’s coast, there are commitments but nothing approaching a guarantee.

Specifically, the agreement—or Memorandum of Understanding (MOU)—between the two parties gives Alberta exemptions from certain federal environmental laws and offers the prospect of a potential pathway to a new oil pipeline to the B.C. coast. The federal cap on greenhouse gas (GHG) emissions from the oil and gas sector will not be instituted; Alberta will be exempt from the federal “Clean Electricity Regulations”; a path to a million-barrel-per day pipeline to the BC coast for export to Asia will be facilitated and established as a priority of both governments, and the B.C. tanker ban may be adjusted to allow for limited oil transportation. Alberta’s energy sector will also likely gain some relief from the “greenwashing” speech controls emplaced by the Trudeau government.

In exchange, Alberta has agreed to implement a stricter (higher) industrial carbon-pricing regime; contribute to new infrastructure for electricity transmission to both B.C. and Saskatchewan; support through tax measures the building of a massive “sovereign” data centre; significantly increase collaboration and profit-sharing with Alberta’s Indigenous peoples; and support the massive multibillion-dollar Pathways project. Underpinning the entire MOU is an explicit agreement by Alberta with the federal government’s “net-zero 2050” GHG emissions agenda.

The MOU is probably good for Alberta and Canada’s oil industry. However, Alberta’s oil sector will be required to go to significantly greater—and much more expensive—lengths than it has in the past to meet the MOU’s conditions so Ottawa supports a west coast pipeline.

The stiffer carbon tax will make Alberta’s oil sector more expensive and thus less competitive at a time when many analysts expect a surge in oil production. The costs of mandated carbon capture will similarly increase costs in the oilsands and make the province less cost competitive. There’s additional complexity with respect to carbon capture since it’s very feasibility at the scale and time-frame stipulated in the MOU is questionable, as the historical experience with carbon capture, utilization and storage for storing GHG gases sustainably has not been promising.

These additional costs and requirements are why the agreement is the not the best possible solution. The ideal would have been for the federal government to genuinely review existing laws and regulations on a cost-benefit basis to help achieve its goal to become an “energy superpower.” If that had been done, the government would have eliminated a host of Trudeau-era regulations and laws, or at least massively overhauled them.

Instead, the Carney government, and now with the Alberta government, has chosen workarounds and special exemptions to the laws and regulations that still apply to everyone else.

Again, it’s very likely the MOU will benefit Alberta and the rest of the country economically. It’s no panacea, however, and will leave Alberta’s oil sector (and Alberta energy consumers) on the hook to pay more for the right to move its export products across Canada to reach other non-U.S. markets. It also forces Alberta to align itself with Ottawa’s activist industrial policy—picking winning and losing technologies in the oil-production marketplace, and cementing them in place for decades. A very mixed bag indeed.

Kenneth P. Green

Senior Fellow, Fraser Institute

Alberta

West Coast Pipeline MOU: A good first step, but project dead on arrival without Eby’s assent

Published on November 27, 2025

Todayville

The memorandum of understanding just signed by Prime Minister Mark Carney and Premier Danielle Smith shows that Ottawa is open to new pipelines, but these are unlikely to come to fruition without British Columbia Premier David Eby’s sign-off, warns the MEI.

“This marks a clear change to Ottawa’s long-standing hostility to pipelines, and is a significant step for Canadian energy,” says Gabriel Giguère, senior policy analyst at the MEI. “However, Premier Eby seems adamant that he’ll reject any such project, so unless he decides not to use his veto, a new pipeline will remain a pipedream.”

The memorandum of understanding paves the way for new pipeline projects to the West Coast of British Columbia. The agreement lays out the conditions under which such a pipeline could be deemed of national interest and thereby, under Bill C-5, circumvent the traditional federal assessment process.

Adjustments to the tanker ban will also be made in the event of such a project, but solely for the area around the pipeline.

The federal government has also agreed to replace the oil and gas emissions cap with a higher provincial industrial carbon tax, effective next spring.

Along with Premier Eby, several First Nations groups have repeatedly said they would reject any pipeline crossing through to the province’s coast.

Mr. Giguère points out that a broader issue remains unaddressed: investors continue to view Canada as a high-risk environment due to federal policies such as the Impact Assessment Act.

“Even if the regulatory conditions improve for one project, what is Ottawa doing about the long-term uncertainty that is plaguing future projects in most sectors?” asks the researcher. “This does not address the underlying reason Carney has to fast-track projects piecemeal in the first place.”

Last July, the MEI released a publication on how impact assessments should be fair, transparent, and swift for all projects, not just the few favoured by Ottawa under Bill C-5.

As of July, 20 projects were undergoing impact assessment review, with 12 in the second phase, five in the first phase, and three being assessed under BC’s substitution agreement. Not a single project is in the final stages of assessment.

In an Economic Note published this morning, the MEI highlights the importance of the North American energy market for Canada, with over $200 billion moving between Canada and the United States every year.

Total contributions to government coffers from the industry are substantial, with tens of billions of dollars collected in 2024-2025, including close to C$22 billion by Alberta alone.

“While it’s refreshing to see Ottawa and Alberta work collaboratively in supporting Canada’s energy sector, we need to be thinking long-term,” says Giguère. “Whether by political obstruction or regulatory drag, Canadians know that blocking investment in the oilpatch blocks investment in our shared prosperity.”

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.