Federal budget sparks mixed reactions in Alberta amid soaring deficit, energy policy shifts

Prime Minister Mark Carney’s first federal budget has landed with a thud — and a flurry of debate — as it reveals a projected $78.3-billion deficit for the current fiscal year, nearly double what the Liberals forecast a year ago.

The budget, tabled Tuesday, outlines a gradual reduction in the deficit to $56.6 billion by 2029-30, but the steep spending increase has drawn sharp criticism and cautious optimism across Alberta.

The Canadian Taxpayers Federation expressed alarm over the ballooning federal debt, which is expected to hit $1.3 trillion by year’s end. Kris Sims, Alberta director of the federation, said she was “earnestly shocked” by the budget’s spending trajectory.

“The interest charges on the debt are costing taxpayers more than a billion dollars a week. That’s like gathering around a newly-built hospital and then burning it down. Every week,” Sims said.

She also criticized the lack of substantial cuts to federal jobs, noting that existing reductions are limited to attrition and fail to address what she called “corporate welfare.”

Despite deficit concerns, the Calgary Chamber of Commerce sees silver linings. Ruhee Ismail-Teja, a spokesperson for the Chamber, acknowledged the fiscal risks but praised the budget’s focus on infrastructure and business growth.

“Export opportunities, new options for procurement — particularly for small and medium businesses — and a considerable amount on infrastructure to match local population growth,” she said.

For his part, new Calgary mayor Jeromy Farkas said he was “cautiously optimistic,” citing the promising commitment to local infrastructure.

“Some really good, positive first steps to commitment to working with municipalities, to addressing some of the housing infrastructure and safety challenges,” he said. “Today’s promises are encouraging but Calgarians will judge this budget by actions on the ground not words on paper.”

One policy of the new budget includes a new procurement rule requiring ministerial approval for companies that choose not to buy Canadian, which Ismail-Teja says could significantly benefit small businesses.

A major point of contention — and potential relief for Alberta’s energy sector — is the federal government’s apparent reconsideration of its proposed cap on oil and gas emissions. The budget suggests the cap could be scrapped if alternative measures like carbon markets, stronger regulations, and carbon capture technologies prove effective.

Ismail-Teja warned that the cap has had a “chilling effect” on investment and collaboration within the sector.

“Companies that are motivated to share technology to reduce emissions actually become competitors under a cap. Replacing it with alternative policies would allow for greater certainty,” she said.

Alberta Finance Minister Nate Horner welcomed the signals around the emissions cap but stressed the need for concrete details, saying they need more than signals.

Horner added that the budget lacked specifics on major projects important to the province.

Premier Danielle Smith says her government is still negotiating with Ottawa to remove policies that have negatively impacted Alberta’s energy industry.

With files from The Canadian Press