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.

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.

The red ink is mainly driven by an expected drop in oil prices, looming U.S. tariffs and a promised tax break for Albertans: minister

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,