CALGARY — JAN GORSKI, director of government relations at the Pembina Institute, made the following statement in response to the Government of Alberta’s 2026 budget.
“Today’s budget shows two things at the same time. The oil and gas industry is still playing an important role in Alberta’s economy – but also, oil and gas alone cannot provide a long-term path to economic health and stability for the province.
“As the world becomes more volatile, oil prices become less predictable. Today’s deficit is a reminder that Alberta is not in control of this – and its budget remains highly vulnerable to oil price fluctuations, no matter how much oil and gas is being produced. With production at record highs this year, and yet still a significant deficit, the answer is not to double down on more oil and gas development. With global investment in clean energy now double investment in fossil fuels, Alberta must actively seek out other, more reliable sources of revenue.
“On that front, Premier Smith’s comments in last week’s address about the importance of economic diversification were welcome. Nevertheless, diversifying and growing industries – such as low-carbon petrochemical production, cement, carbon capture, renewable energy and battery storage – will only come if companies have confidence in the investment environment. This is why the April 1 deadline for MOU talks between Alberta and Ottawa should remain top-of-mind. Investors urgently need answers on the future of key elements of that agreement, such as industrial carbon pricing, methane regulations and Alberta’s proposed path towards a clean electricity grid – all of which will be crucial to supporting diversified industrial investment in this province.”
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Key facts
- According to various credible agencies, oil prices are forecast to remain muted in 2026. Notably, Alberta’s forecast remains higher than others.
- Major oil producers like Shell, BP, and Equinor; the International Energy Agency; and global risk managers like DNV all expect global oil demand to begin a permanent decline within the next decade. Global demand is the single most important factor in determining the oil prices that Alberta is subject to.
- Despite muted prices, Canadian oil production averaged 4.1m barrels/day in 2025, an all-time high, as companies remained focused on mergers, acquisitions, debottlenecking and efficiencies.
- Pembina Institute analysis has uncovered how this behaviour from oilsands companies is contributing to diminishing employment returns of rising oil and gas production. In the decade to 2023, the number of jobs per barrel of oil (and natural gas equivalent) fell by 43%, while production increased by 47%.
- Meanwhile, Alberta’s renewable energy industry continues to suffer under multiple years of policy uncertainty in Alberta, following the province’s implementation of a range of overlapping regulations and restructures that affect the electricity sector as a whole but are of particular disadvantage to renewables developers. According to analysis from Business Renewables Centre-Canada, while existing wind and solar projects generated $70 million in municipal tax revenue in 2025, Alberta municipalities lost out on an estimated $84 million in potential revenue from cancelled projects.
- According to the International Energy Agency, in 2023, clean energy added around USD 320 billion to the world economy, or 10 per cent of global GDP growth. This is roughly equivalent to adding an economy the size of the Czech Republic to global output. The IEA defined clean energy as deployment of renewables and other emissions-free electricity, manufacturing of clean energy technologies such as solar, wind and batteries, as well as sales of low-carbon energy uses – such as electric vehicles and home heat pumps.
- According to Energy and Climate Intelligence Unit, globally clean energy jobs now outnumber those in oil, gas and coal and fossil-engine manufacturing (32.1 million). Renewables jobs almost doubled from 8.5 million in 2015 to 16.2 million in 2023.
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Alex Burton
Director, Communications
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