The financial outlook for Alberta’s oil budget continues to deteriorate, according to Finance Minister Nate Horner.

Horner announced that due to plummeting oil prices, the projected budget deficit for the current financial year is expected to increase by $1.3 billion, bringing the total deficit to $6.5 billion.

This significant swing in financial fortunes comes on the heels of a surplus of $8.3 billion the previous year.

Despite these challenges, Horner emphasized that a radical reaction to the budget shortfall is not the solution. He acknowledged the impact of oil prices and trade policy uncertainties on Alberta’s economy, citing them as significant risks.

The province’s taxpayer-supported debt has also risen by $1.7 billion, reaching $84.3 billion.

Opposition Finance Critic Court Ellingson criticized the government’s handling of the budget, calling it an example of “tax incompetence.”

In response to the budget challenges, the government is in discussions with various trade unions to address rising costs. Negotiations with the Alberta Teachers’ Association and other unions are ongoing.

Horner hinted at potential spending cuts in the upcoming budget, similar to the federal government’s approach. The government remains committed to fulfilling its promise of a personal income tax break for Albertans, despite the budget constraints.

The projected deficits are expected to persist until the provincial elections in 2027, highlighting the long-term financial challenges facing Alberta.