Canada's oil-producing province of Alberta on Thursday forecast a budget deficit of C$5.2 billion ($3.5 billion) for the 2025/26 fiscal year if U.S. tariffs are implemented and decrease government revenues and slow economic growth.

The red ink is mainly driven by an expected drop in oil prices, looming U.S. tariffs and a promised tax break for Albertans: minister

Alberta is forecasting it will end the next fiscal year with a $5.2 billion deficit but that could soar to $8.7 billion under a worst-case tariff scenario outlined in Thursday’s provincial budget.

Alberta’s finances, tied for generations to the steep peaks and sharp valleys of oil and gas prices, are once again plunging deep into deficit, with no immediate relief in sight.