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.

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's new budget means nearly all working residents will pay less in income taxes, while home and business owners — especially those in Calgary — will pay more in provincial property taxes.The province also expects to take in more money from several other new taxes and fees.