Canadian Provincial Deficits Remain Stable as Higher Oil Prices Boost Alberta's Fiscal Outlook, BMO Says

12:40 PM EDT, 10/13/2026 (MT Newswires) -- Canada's combined provincial deficit is forecast at CA$36.4 billion in fiscal year 2026-27, little changed from the previous year and equivalent to just over 1% of gross domestic product, according to BMO Capital Markets in a Tuesday note. Despite ongoing economic uncertainty, provincial economic performance has broadly aligned with spring forecasts, while higher oil prices being the main driver of fiscal revisions, wrote BMO in the note. Alberta has recorded the strongest fiscal improvement, moving to an anticipated CA$2 billion surplus from a budgeted CA$9.4 billion deficit, equivalent to 0.4% of GDP. The revision is underpinned by a CA$11.7 billion increase in projected revenue, reflecting a higher assumed West Texas Intermediate oil price of $73.50 per barrel, compared with $60.50 previously, said the bank. Alberta is the only province expected to post a balanced budget or surplus in FY2026-27, added BMO. Provinces continue to face rising healthcare and education costs while sustaining strong capital investment, with combined borrowing needs forecast at CA$138 billion in FY2026-27, near post-pandemic highs, said the bank.