Last night, Premier Danielle Smith addressed Albertans with a primetime televised address. The Premier's message was one that built confidence in the Alberta UCP Government's path through difficult times.
With the 2026 Alberta Provincial budget to be delivered by Finance Minister Nate Horner next week looming and economists projecting a significant provincial deficit due to softening oil and natural gas prices, the Premier used her televised address to both set expectations and address the simmering political issue of a referendum regarding Alberta’s future within Canada that is dominating coffee shop conversations. But rather than simply delivering bad news about the drop in oil revenues, the Premier broadened the conversation toward a generational legacy and a bullish view on Alberta's economic future.
Amidst a highly charged political atmosphere, highlighted by a massive shift in CanadaUS relations, a pending referendum, and deep frustrations with Ottawa the Premier’s address was a strategic exercise in projecting stability, direct democracy, and economic sovereignty.
Here is our evaluation of the Premier’s address and what it means for stakeholders, businesses, and Albertans heading into Budget 2026.
Key Takeaways
- Restraint, Not Austerity: the Premier was quick to reassure Albertans that drastic spending cuts to core services will not be found in this year's budget, explicitly protecting the approved wage increases for doctors, nurses, and teachers. However, the trade-off is a strict mandate to prioritize "needs before wants." The government will seek to limit spending increases to below the rate of inflation plus population growth, cut unnecessary bureaucracy, and implement more income-testing for social programs. This is a pragmatic acknowledgment of the expected deficit, but also signaling to markets that the government is choosing prudence over reckless borrowing.
- The Heritage Trust Fund: the centerpiece of Smith’s address was a confirmation of the major pivot back to the vision of Peter Lougheed. Acknowledging that Alberta is unsustainably dependent on non-renewable resource revenues—where every $1 drop in the price of oil costs the treasury roughly $750 million—she leaned hard into the province's long-term savings strategy. This budget represents the first major test of the strategy the Premier laid out to grow the Alberta Heritage Fund to $250 billion by 2050. Pointing out that the fund has already doubled from $16 billion to almost $32 billion, the government is mandating that all income earned in the Fund be aggressively reinvested. This is the first real test of the 2022 plan to build the fund over the long term.
- Doubling Down on Energy and Growth: to fuel this long-term savings goal, the Premier outlined a highly ambitious medium-term strategy: doubling Alberta’s oil and gas production and exports to over 8 million barrels a day by 2035. Leveraging the recent energy agreement signed with Ottawa and ongoing pipeline expansions, the message to industry is clear that Alberta intends to grow its way out of future deficits by maximizing volume even when global commodity prices dip. This was also buttressed by the clear message that while Alberta will be a resource powerhouse, it will also lead the nation in diverse economic growth.
- Direct Democracy and Sovereignty within a United Canada: the speech cannot be divorced from the broader political context, most notably the growing push for separation from Canada. When the Premier spoke of the "unprecedented strain" of out-of-control federal immigration policies, she validated the deep-seated grievances many Albertans hold toward Ottawa. To channel separatist frustrations into a constructive goal, the Premier officially announced a government-led referendum for October of this year. Albertans will be asked to weigh in on nine key questions aimed at maximizing provincial autonomy, briefly including:
- Immigration & Services: taking control over regional immigration, limiting certain provincially-funded social services to citizens and permanent residents (or requiring a 12-month residency period/premiums for non-permanent residents), and prioritizing economic migrants.
- Elections: requiring proof of citizenship to vote in provincial elections.
- Constitutional Reform: abolishing the federal Senate and allowing provinces to appoint superior court justices.
- Provincial Jurisdiction: opting out of intrusive federal programs (while keeping the funding) and asserting the priority of provincial laws over federal ones.
By leveraging direct democracy, the Premier is offering a roadmap for an Alberta that is strong enough to stand up to Ottawa and manage its own affairs without having to abandon Confederation entirely. This will be welcome news for investors but it is too early to know if this will satisfy those who are now leaning toward support for separation from Canada and will no doubt trigger the opposition NDP, who under leader Naheed Nenshi struggle to find a narrative that resonates in Alberta's political atmosphere.
Looking Ahead to Budget 2026
For stakeholders and industries watching next week's budget, the era of relying on the government to open the spending taps during oil booms appears to be ending. The focus will shift heavily toward disciplined fiscal management, debt reduction, and aggressive savings.
Next week, we will see the specific details of how the province will manage this year's deficit while still keeping its promise to reinvest in the Heritage Fund. As the Premier noted, we cannot predict the weather in an Alberta spring, nor can we predict global oil prices. But with this address, the government has drawn a firm line in the sand regarding how it plans to weather the storms ahead, in the context of Alberta staying in Canada while also charting a course for a stronger, more autonomous Alberta.
