Alberta Finance Minister Nate Horner speaks about the proposed 2026 provincial budget in Edmonton on Thursday.--CP Photo Jason Franson
zmason@medicinehatnews.com
ZOE MASON
zmason@medicinehatnews.com
The province will spend at least three more years in the red according to the 2026-27 budget released Thursday.
Budget 2026 features a $9.4 billion deficit – $4.2 billion more than last year’s shortfall and $4.5 billion more than should be allowed under the government’s own fiscal framework.
Finance Minister Nate Horner said the government will be looking to adjust the fiscal framework accordingly in the fall session of the legislature.
Horner says he anticipates some political fallout from Thursday’s budget.
“We created these rules, and I’m breaking them. It bothers nobody more than it does me,” said Horner.
Horner says the shortfall reflects his government’s commitment to maintaining and improving key services like education, health care and social supports.
“We want to be clear with Albertans that we won’t sacrifice public services to make our deficit disappear, and we aren’t raising personal income tax.”
Forecasts project deficits of $7.6 billion and $6.9 billion in the following two years.
The budget includes increases to several fees, including education property taxes, fees for seniors living in continuing care and registration costs for small businesses.
“All of these rising costs are despite years of extraordinary resource revenues and record production,” said Court Ellingson, the NDP Shadow Minister for Finance.
“Under these conditions, Albertans should be seeing economic stability, more jobs and better outcomes from the services they rely on, yet somehow this government can’t balance the books or deliver results.”
Under the Local Government Fiscal Framework, municipalities are getting less funding than previous years.
After receiving $820 million in 2025-26, municipalities across the province have been allocated $800 million in the 2026-27 budget.
The subsequent two years will see funding allocations jump up again, to $895 million for both 2027-28 and 2028-29.
Locally, the City of Medicine Hat is forecasting a slight drop in its allocation from the LGFF grant. According to city budget documents, the allocation is projected to fall from $9.46 million last year to $9.22 million in 2026.
The three-year average funding across both the LGFF and the corresponding federal grant funding is expected to measure 17.2 per cent lower than the 10-year average between 2024 and 2026, a difference representing $2.7 million in lost funding.
The LGFF formula was updated in 2023 to increase or decrease based on the revenue growth of the province, a change the city says increases uncertainty and risk related to future funding.
The City of Medicine Hat is receiving investment in several local infrastructural projects.
Medicine Hat comes up five times in the budget’s fiscal plan.
Medicine Hat will benefit from a $20-million capital grant that will support the construction of three new CASA House facilities, including one in the Hat.
CASA house is a non-profit provider of mental health treatment for Albertan youth age three to 18.
The $20 million in this year’s budget is part of a $75-million capital grant commitment initiated in 2023 that aims to quadruple the number of beds in the province to about 80, facilitating treatment for more than 300 young Albertans.
Medicine Hat Regional Hospital is also due to receive part of a $59-million investment over the next three years for enhancing intensive care unit capacity at that facility and at Chinook Regional Hospital in Lethbridge.
The budget sets aside $152 million for twinning the section of Highway 3 stretching from Seven Persons to Medicine Hat.
A further $2 million has been allocated for planning the Centre for Community Wellness at Medicine Hat College.
