Budget 2026: Bigger Government, Bigger Debt

The Alberta government has released Budget 2026, and while it contains some positive language about growth and stability, we’re concerned about the overall direction it sets for our province.

At a time when many Albertans are tightening their belts, this budget moves firmly toward higher spending, ongoing deficits, and a significantly expanded government footprint.

First and foremost, the government has abandoned balanced budgets in favour of large, multi-year deficits.

Despite expecting revenue to drop by $700 million compared to last year ($74.6 billion vs $75.3 billion), the government has chosen to increase spending by $4.5 billion (from $79.4 billion to $83.9 billion).

That means the province is now projecting deficits of $9.4 billion in 2026-27, $7.6 billion in 2027-28, and $6.9 billion in 2028-29.

And over that same period, taxpayer-supported debt is now expected to rise from $92.1 billion to $137.5 billion.

That means more borrowing today - and nearly $5 billion a year in debt interest payments by 2028-29.

That’s money that won’t go to frontline services or stay in the pockets of taxpayers - it will simply service past overspending.

At the same time, despite highlighting Alberta’s “tax advantage”, the government is introducing or increasing several taxes and fees.

Most significantly, the government is following through on their plan to fund one-third of education costs through property taxes.

This will be done by increasing property tax rates to $2.84 per $1,000 for residential/farmland properties and $4.17 per $1,000 for non-residential properties.

While the exact cost of this to you will vary significantly depending on your location and property value, it translates to about $300 extra per year (a roughly 20% increase) for an average Calgary household.

The government is also introducing a new 6% tax on passenger vehicle rentals, a 50% increase to the tourism levy (from 4% to 6%), a new levy on large-scale data centres, and more.

While none of these other measures are enormous on their own, taken together, they represent a steady expansion of the tax burden.

To be clear, we recognize that Alberta faces real pressures, from population growth to infrastructure needs.

But, government spending in Alberta has grown far quicker than the combined rate of inflation and population growth in recent years.

Long-term prosperity doesn’t come from structural deficits, rising debt, and expanding bureaucracy.

It comes from disciplined spending, a stable tax environment, and a government that focuses on core responsibilities.

Albertans deserve a serious conversation about sustainability before today’s temporary pressures become tomorrow’s permanent problems.

At the Alberta Institute, it’s our job to help Albertans have that conversation, and to advocate for policies rooted in fiscal responsibility, individual liberty, and limited government.

If you value our work, we encourage you to stay engaged by getting involved and supporting our efforts by making a donation:

- The Alberta Institute Team