Lennie Kaplan is a former senior manager in the fiscal and economic policy division of Alberta’s Ministry of Treasury Board and Finance, where, among other duties, he examined best practices in fiscal frameworks.Premier Danielle Smith and the Alberta government continue to bet heavily on increasing oil revenues to rescue it from a future of structural fiscal shortfalls and rising debt. This fiscal policy is buttressed by increasingly insistent calls from the Alberta government on Mark Carney’s federal Liberals to quickly approve increased pipeline takeaway capacity. This potentially dangerous style of fiscal planning could be reinforced by the new oil sands/raw bitumen production forecasts coming from the Alberta government in Budget 2026. I call this the “Alberta Budget 2026 wild card.”In October 2025, Premier Smith tasked the Ministry of Energy and Minerals with developing a roadmap to increase Alberta oil production to six million barrels per day by 2030. We assume, for the purposes of this analysis, that most of this growth (an estimated 5.4 million barrels per day by 2030) will come from oil sands/raw bitumen production.This 5.4 million estimated oil sands/raw bitumen barrel per day target by 2030 appears well beyond the latest World Energy Outlook (WEO) of about 3.8 million oil sands barrels per day by 2030 and the 4.005 million barrels per day outlook for raw bitumen production by 2030, from the Alberta Energy Regulator.And, according to my recent survey of private sector forecasters, West Texas Intermediate (WTI) crude oil prices are now projected to average about $65.50 USD per barrel in 2027/28, and $67.00 USD per barrel in 2028/29. The WTI-WCS differential is estimated in the same survey at $13.30 USD per barrel in 2027/28, and $13.40 USD per barrel in 2028.In Budget 2025, the Alberta government initially projected raw bitumen production to reach 3.75 million barrels per day by 2027/28. If the Alberta government now decides to follow a path to reach a revised 2030 target of about 5.4 million raw bitumen barrels per day, I estimate that raw bitumen production would need to be forecast as high as 3.85 million barrels per day in 2027/28 and 4.6 million barrels per day in 2028/29..These production forecasts could translate into inflating bitumen royalties in Budget 2026 by an estimated $350 million in 2027/28 and $2.6 billion in 2028/29. Whether these forecasts should be considered reasonable and prudent as part of Alberta’s fiscal scenario planning remains a big question — in fact, the Budget 2026 “wild card” question.It should be noted that in the mid-to-late 1980s and the early 1990s, the Alberta government was known for presenting revenues at budget time.Could the current Alberta government follow a similar strategy in Budget 2026 by using optimistic raw bitumen production and bitumen royalty forecasts for 2027/28 and 2028/29 to make it appear that it has grown itself out of a deficit, rather than making tough fiscal choices on spending and revenue diversification in a timely fashion?Thus, one of the compelling issues for Budget 2026 is whether the Smith government will double down or even triple down on its dependence on volatile oil revenues to fund runaway spending habits.With oil prices expected to remain weaker for the foreseeable future, I now estimate that Alberta's total revenue growth should be far more restrained over the next three fiscal years, averaging about 3.8% per year, rather than the 7% per year growth rate which prevailed between 2022/24 and 2024/25.I am calling on the Alberta government to commit to realistic and prudent fiscal planning in Budget 2026, and not to succumb to the old days of overestimating oil revenues to serve political purposes. Please don’t play the “Budget 2026 wild card.”Lennie Kaplan is a former senior manager in the fiscal and economic policy division of Alberta’s Ministry of Treasury Board and Finance, where, among other duties, he examined best practices in fiscal frameworks. In 2019, Mr. Kaplan served as executive director to the MacKinnon Panel on Alberta’s finances—a government-appointed panel tasked with reviewing Alberta’s fiscal policies and recommending reforms.
