Alberta is forecasting a $2-billion surplus for 2026-27, reversing a projected $9.4-billion deficit after higher oil prices lifted expected resource revenue.

The first-quarter fiscal update released Thursday Aug. 27, shows an $11.4-billion improvement from the budget presented in February.

Most of the change comes from non-renewable resource revenue. The province increased that forecast by $9.7 billion to $23 billion for the year.

Alberta now assumes West Texas Intermediate crude will average US$73.50 a barrel in 2026-27. That is US$13 higher than the budget assumption of US$60.50.

The province also added $545 million to expected corporate income tax revenue and more than $1.4 billion to other revenue forecasts.

Total revenue is now forecast at $86.3 billion, up $11.7 billion from the February budget.

The update illustrates the direct connection between global oil markets and the money available for provincial programs, infrastructure and savings.

The higher forecast does not represent cash already collected for the full year. Oil prices, production, corporate profits and other revenue sources can move before the books are closed.

For rural Alberta, provincial finances influence funding for highways, health care, schools, agriculture programs, water systems and grants to municipalities.

The government expects Alberta’s real gross domestic product to grow 2.3 per cent in 2026, half a percentage point more than forecast in the budget. Growth of 2.5 per cent is projected for 2027.

Energy activity, manufacturing, agriculture exports, major projects and consumer spending were identified as contributors to the stronger economic outlook.

The Alberta Heritage Savings Trust Fund is forecast to reach $32.1 billion by the end of 2026-27. The government has set a target of $35 billion by the end of 2027.

Alberta also expects the 2025-26 fiscal year to finish with a surplus. Final results are scheduled for release in early fall after work by the Office of the Controller and the auditor general is complete.

The forecast would produce a sixth consecutive annual surplus if the expected 2025-26 and 2026-27 results are both realized.

The first-quarter update does not eliminate the risks identified in the February budget. Alberta continues to rely heavily on resource revenue that can rise or fall with global prices.

The next quarterly update will show whether oil prices and revenue remain on the path set out Thursday.