Alberta budget 2026: What it means for students
By Imran Ahmed, February 26 2026—
Alberta’s United Conservative Party (UCP) government tabled its budget for the 2026-27 fiscal year on Thursday, Feb. 26.
Budget 2026’s total expenses are estimated to be $83.92 billion. This is an increase from last year’s budget, with quarter three (Q3) forecasts estimating $79.42 billion total expenses in 2025-26.
Although the deficit was previously projected at $6.4 billion, the budget estimates it to be $9.373 billion, including a $7.4 billion and $6.9 billion deficit in the following years. If these projections hold, it will mark four consecutive years with a significant deficit, including a revised 4.1 billion deficit for the 2025/26 fiscal year. Prior to this, Alberta enjoyed four consecutive years of surpluses, with a recorded $11.64 billion surplus in the 2022-2023 fiscal year.
The single largest driver for this apparent fiscal instability is the province’s reliance on royalties from Alberta’s oil and gas industry.
Although oil prices started off strong in early 2025, they largely shrunk as the year passed on. In January 2025, the monthly average per barrel price of Western Canadian Select (WCS) at Hardisty, AB, the standard export-grade crude for Canada, was nearly $90, adjusted for foreign exchange rates. By January 2026, the monthly average per barrel price of WCS was approximately $64.56, adjusted for the average monthly exchange rate, according to the Alberta Economic Dashboard. The government explained that this volatility is largely due to rising geopolitical tensions and trade uncertainty induced from President Trump’s aggressive tariff policy, which has become evermore important in the upcoming Canada-United States-Mexico Agreement negotiations.
Non-renewable resources, particularly bitumen, play an outsized role in Alberta’s revenues. Royalties from this sector are estimated to comprise approximately 17 per cent of total revenues in this fiscal year. Compared to last, bitumen and crude oil royalties are estimated to decrease by just over $3 billion, due to lower oil prices.
For every dollar reduction in the per barrel price of oil, the Alberta government forgoes nearly $700 million in revenues, according to Budget 2026.
Premier Danielle Smith’s UCP government had warned of a tough budget with significant deficits. However, the province has ruled out any personal income tax hikes or deep service cuts. Instead, the government opted for increased debt-financed spending to fill the difference, pointing to Alberta’s relatively stable economic positioning, with the lowest net debt-to-GDP ratio amongst Canadian provinces, projected to be 10.5 per cent by March 2027.
However, Budget 2026 does try to recover at least some of the deficit through the introduction of new taxes on vehicle rentals, an increase on the tourism levy from four per cent to six per cent, which applies to the price of short-term accommodations such as hotels and inns, and a recently introduced tax on large scale data centres.
The government also holds a $2 billion contingency, included as part of the deficit, to address any unexpected circumstances such as natural disasters. Although Alberta holds a sovereign wealth fund, known as the Alberta Heritage Fund, the government will not withdraw any money for fiscal spending purposes until it reaches a target of $250 billion, which is anticipated to happen by 2050. The fund is currently sitting at a year-end balance of $31.9 billion, representing a 7.7 per cent return on the fiscal year.
Advanced education funding
For students, the most immediate impact of Budget 2026 lies in post-secondary institution (PSI) funding.
Since 2019, the U of C has faced a $135 million cut to its Campus Alberta Grant (CAG), unadjusted for inflation, which accounts for around 23 per cent of its total CAG funding. Alongside a steep reduction in international student enrolment, it has placed the university in a difficult financial position. By November 2025, the U of C faced a $34.7 million shortfall.
Students are feeling the funding strain. For example, certain programs in the Faculty of Arts are facing program closures and consolidations. New reporting from CBC shows that the University of Calgary is closing its Classics and Religion department and considering the consolidation of other undergraduate programs in the Faculty of Arts.
Budget 2026 estimates advanced education operating expenses to be $6.456 billion for this fiscal year. This is up $73 million from the Q3 forecasts for the previous fiscal year.
The government committed $2.7 billion to fund these operating expenses, an increase of $148 million from 2025/26. However, PSI’s are still expected to bear the majority of the expenses, with 60 per cent set to be covered through own-source revenues. This is up from 58 per cent in the last fiscal year.
Given projected deficits for the next three years and a rather bearish sentiment on oil prices, it seems that PSI’s will be expected to continue covering at least the current proportion operating expenses through their own-source revenues, if not more.
Loans and grants
$1.3 billion is allocated for PSI loans, grants, scholarships and awards. This includes $124 million in foundational learning assistance grants, $49 million for apprenticeship learning grants and $393 million in student aid, down from the previous year’s updated Q3 forecast of $454 million.
$887 million will go to student loans “low interest rates, and favorable repayment terms and conditions”. This marks the second year where there have been cuts to student loans. In the previous fiscal year, it was at $990 million, down from $1.2 billion in the year prior.
The Alberta Heritage Scholarship fund will contribute an estimated $71 million, up from $60 million last year.
Long-term investment
Budget 2026 reserves $1.8 billion over three years for PSI facilities, capital projects and renewal funding. The U of C will receive $160 million over three years for the Multi-Disciplinary Hub, with $40 million in funding estimated for this year. There will also be $83 million in funding over three years to support doubling enrolment at the University of Calgary Faculty of Veterinary Medicine by 2028-29.
There is a focus for funding in high-demand fields, as the government is seeking to align PSI programs with labour market demands. Budget 2026 includes a further $353 million over three years in continued support for Targeted Enrollment Expansion initiatives. This will include new seats in graduate and undergraduate engineering, health care and education programs.
Persistent forecasted deficits imply that it is unlikely that the government will step in to aid programs that don’t produce positive labour market outcomes or fill workforce gaps.
Budget 2026 also allocates a 10.8 per cent increase in operational education funding, including an additional $722 million year-over-year, with plans to hire 5,000 staff over the next three years. This announcement follows the October strike by the Alberta Teachers’ Association and the government’s use of back to work legislation invoking the notwithstanding clause. Nevertheless, this is positive news for undergraduates in education programs.
The budget makes mention of the Expert Panel on PSI’s, which was commissioned in late 2024 with the mandate of keeping Alberta’s advanced education system domestically and globally competitive.
“The most significant recommendation from the panel is the development of a new funding model, intended to target resources where there is labour market need. The recommendations are currently under review,” the 2026 budget states.
On Feb. 26, at a press briefing on Budget 2026, The Gateway asked about how exactly the government considered recommendations from the Expert Panel in its budget.
“When it comes to these specific recommendations, I may have to direct you to the other minister, but I would say that having sat through the treasure board process for two months, I think advanced education did quite well in this budget, all things considered. Especially on the capital side,” said Minister of Finance and President of Treasury Board, Nate Homer.
Immigration
Alberta’s upcoming fall referendum will ask voters to weigh in on proposed changes to immigration policy, including whether the province should take greater control over immigration and whether to require certain immigrants to pay fees to access health care and education, or outright restrict certain services until they’ve lived in the province for a year.
Premier Danielle Smith has defended the referendum against critics, saying it will help address pressures on social services which she attributes in part to the federal government’s immigration policy over the past decade.
Budget 2026 projects a sharp decline in non-permanent residents in Alberta, largely due to the recent recalibration of federal immigration policy through 2026-2028 Levels Plan. The province is forecasted to shed roughly 30,000 temporary residents, a reversal from net gains in 2025 and 2024.
The budget states that this is expected to be a significant drag on the economy, stalling population and consumer spending growth. However, positive net inflows of inter-provincial migrants, which has increased in the past few years, is expected to mostly offset the decline. The budget does not produce a per-person dollar estimate of the net fiscal cost or benefit of immigrants.
Transportation
The U of C is known to be a commuter school, with approximately 52 per cent of students using public transit as their primary mode of transportation to travel to and from campus.
Budget 2026 allocates approximately $2.35 billion over their updated three year funding plan for light rail transit (LRT) projects in Edmonton and Calgary. This is a downsize from last year’s budget, which had an estimated $2.9 billion in funding over three years.
Calgary will receive an estimated $139 million in the 2026/27 fiscal year for LRT projects. The previous budget had allocated $100 million in the 2025/26 fiscal year, but the updated Q3 forecast revises that number down to $58 million.
Similarly, Budget 2025 had allocated $6 million to the design of the Blue Line connector to Calgary International Airport. However, Q3 forecasted that number to be $850,000. Budget 2026 estimates $1.07 million in annual funding over the next three years for the extension.
$168 million is allocated for Deerfoot Trail upgrades, with a total $266 million estimated by 2028/29. The stated goal is to alleviate traffic congestion and maintain safety on the highway. Notably, the Q3 forecast revised that number, increasing funding for the upgrade from $197 million to $255 million.