Alberta
With spending restraint, Alberta can re-introduce a rainy-day fund worth $9.8 billion by 2025/26

From the Fraser Institute
It’s Time to Get Off the Resource Revenue Rollercoaster: Re-establishing the Alberta Sustainability Fund
With spending restraint, Alberta can re-introduce a rainy-day fund worth $9.8 billion by 2025/26 that could help insulate the province’s budget from swings in resource revenue, finds a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“Alberta has an ongoing fiscal problem fueled by volatile resource revenues, but reintroducing a rainy-day fund, based on the previously successful Alberta Sustainability Fund, would help get Alberta off this resource revenue rollercoaster and stabilize provincial finances for the long-term,” said Tegan Hill, associate director of Alberta policy at the Fraser Institute and co-author of There’s time to get off the resource revenue rollercoaster: Re-establishing the Alberta Sustainability Fund.
Alberta governments typically include all resource revenue in the budget, meaning that during periods of relatively high resource revenue, the province enjoys budget surpluses but faces pressure to increase spending, and when resource revenues decline, with comparatively high levels of spending, the province’s finances turn to deficits.
Consider that amid the windfall in resource revenue, in Budget 2023, the Alberta government increased cumulative spending by $10.1 billion from 2022/23 through 2024/25 compared to the 2022 Mid-Year Fiscal update just three months earlier.
Rather than continue to spend relatively high one-time resource revenue, the Alberta government can use this opportunity to stabilize provincial finances over the long-term.
By limiting resource revenue included the budget to a stable amount, it will thereby limit the amount of money available for annual spending. Any resource revenue above the set stable amount would be automatically saved in a rainy-day fund to be withdrawn to maintain that stable amount in years with relatively low resource revenue, thus, helping to avoid budget deficits.
The study calculates that with spending restraint Alberta can fund a rainy-day fund worth $9.8 billion by 2025/26.
“The rainy-day fund could be implemented all while still maintaining a balanced budget for Alberta,” Hill said.
Summary
- Alberta’s volatile resource revenues are fueling its ongoing fiscal problem. The provincial government typically includes all resource revenue in its budget. When resource revenue is relatively high, the province enjoys budget surpluses but faces pressure to increase spending; when resource revenues drop, spending remains high and the province turns to deficits.
- Despite efforts to better manage Alberta’s finances, the Smith government is largely repeating past mistakes by increasing spending during a period of relatively high resource revenue.
- In the 2022 mid-year update, the Smith government increased the plan for nominal program spending from Budget 2022 every year from 2022/23 through 2024/25 for a cumulative increase of $5.9 billion. In Budget 2023, the Smith government increased the plan further with a cumulative increase of $10.1 billion from 2022/23 through 2024/25 compared to the 2022 mid-year update.
- Rather than spend all of the resource revenue in years when it is relatively high, the Alberta government should use this opportunity to stabilize provincial finances over the long-term by re-introducing a rainy-day account based on the earlier Alberta Sustainability Fund (ASF).
- To do so, it would limit the resource revenue included the budget to a stable amount, thereby limiting the amount of money available for annual spending. Any resource revenue above the set stable amount would be automatically saved in the ASF to be withdrawn to maintain that stable amount in years with relatively low resource revenue. The government could implement the ASF while maintaining a balanced budget and without an annual reduction in nominal spending.
- Based on 2023 budget projections, with spending restraint, the provincial government could re-introduce an ASF worth $9.8 billion by 2025/26.
Authors:
Alberta
Big win for Alberta and Canada: Statement from Premier Smith

Premier Danielle Smith issued the following statement on the April 2, 2025 U.S. tariff announcement:
“Today was an important win for Canada and Alberta, as it appears the United States has decided to uphold the majority of the free trade agreement (CUSMA) between our two nations. It also appears this will continue to be the case until after the Canadian federal election has concluded and the newly elected Canadian government is able to renegotiate CUSMA with the U.S. administration.
“This is precisely what I have been advocating for from the U.S. administration for months.
“It means that the majority of goods sold into the United States from Canada will have no tariffs applied to them, including zero per cent tariffs on energy, minerals, agricultural products, uranium, seafood, potash and host of other Canadian goods.
“There is still work to be done, of course. Unfortunately, tariffs previously announced by the United States on Canadian automobiles, steel and aluminum have not been removed. The efforts of premiers and the federal government should therefore shift towards removing or significantly reducing these remaining tariffs as we go forward and ensuring affected workers across Canada are generously supported until the situation is resolved.
“I again call on all involved in our national advocacy efforts to focus on diplomacy and persuasion while avoiding unnecessary escalation. Clearly, this strategy has been the most effective to this point.
“As it appears the worst of this tariff dispute is behind us (though there is still work to be done), it is my sincere hope that we, as Canadians, can abandon the disastrous policies that have made Canada vulnerable to and overly dependent on the United States, fast-track national resource corridors, get out of the way of provincial resource development and turn our country into an independent economic juggernaut and energy superpower.”
Alberta
Energy sector will fuel Alberta economy and Canada’s exports for many years to come

From the Fraser Institute
By any measure, Alberta is an energy powerhouse—within Canada, but also on a global scale. In 2023, it produced 85 per cent of Canada’s oil and three-fifths of the country’s natural gas. Most of Canada’s oil reserves are in Alberta, along with a majority of natural gas reserves. Alberta is the beating heart of the Canadian energy economy. And energy, in turn, accounts for one-quarter of Canada’s international exports.
Consider some key facts about the province’s energy landscape, as noted in the Alberta Energy Regulator’s (AER) 2023 annual report. Oil and natural gas production continued to rise (on a volume basis) in 2023, on the heels of steady increases over the preceding half decade. However, the dollar value of Alberta’s oil and gas production fell in 2023, as the surging prices recorded in 2022 following Russia’s invasion of Ukraine retreated. Capital spending in the province’s energy sector reached $30 billion in 2023, making it the leading driver of private-sector investment. And completion of the Trans Mountain pipeline expansion project has opened new offshore export avenues for Canada’s oil industry and should boost Alberta’s energy production and exports going forward.
In a world striving to address climate change, Alberta’s hydrocarbon-heavy energy sector faces challenges. At some point, the world may start to consume less oil and, later, less natural gas (in absolute terms). But such “peak” consumption hasn’t arrived yet, nor does it appear imminent. While the demand for certain refined petroleum products is trending down in some advanced economies, particularly in Europe, we should take a broader global perspective when assessing energy demand and supply trends.
Looking at the worldwide picture, Goldman Sachs’ 2024 global energy forecast predicts that “oil usage will increase through 2034” thanks to strong demand in emerging markets and growing production of petrochemicals that depend on oil as the principal feedstock. Global demand for natural gas (including LNG) will also continue to increase, particularly since natural gas is the least carbon-intensive fossil fuel and more of it is being traded in the form of liquefied natural gas (LNG).
Against this backdrop, there are reasons to be optimistic about the prospects for Alberta’s energy sector, particularly if the federal government dials back some of the economically destructive energy and climate policies adopted by the last government. According to the AER’s “base case” forecast, overall energy output will expand over the next 10 years. Oilsands output is projected to grow modestly; natural gas production will also rise, in part due to greater demand for Alberta’s upstream gas from LNG operators in British Columbia.
The AER’s forecast also points to a positive trajectory for capital spending across the province’s energy sector. The agency sees annual investment rising from almost $30 billion to $40 billion by 2033. Most of this takes place in the oil and gas industry, but “emerging” energy resources and projects aimed at climate mitigation are expected to represent a bigger slice of energy-related capital spending going forward.
Like many other oil and gas producing jurisdictions, Alberta must navigate the bumpy journey to a lower-carbon future. But the world is set to remain dependent on fossil fuels for decades to come. This suggests the energy sector will continue to underpin not only the Alberta economy but also Canada’s export portfolio for the foreseeable future.
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