Alberta’s books are set to turn red, according to Thursday’s budget, as the province readies to reckon with three straight years of projected fiscal shortfalls brought on by tariff-based uncertainty,

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 province is projecting a $5.2-billion deficit, but is offering income tax cuts that will pull more than $1-billion from provincial coffers

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.

Alberta is bracing for a trade war with the United States that, when coupled with sagging energy prices, will usher in years of deficits, according to the provincial budget tabled Thursday, adding to the growing list of provinces preparing for economic turmoil that would accompany tariffs on Canadian goods.