An economist from the University of Calgary says the impact of sweeping American tariffs on Canadian imports could plunge Alberta and the rest of Canada into a recession.

U.S. President Donald Trump says economywide tariffs on imports from Canada and Mexico will start Tuesday, threatening a trade war expected to significantly harm Alberta’s economy and broader business relations. “No room left for Mexico or for Canada (to make a deal),” Trump said Monday at the White House.

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's 2025 budget is projected to have a C$5.2 billion deficit due to lower oil prices, potential US tariffs, and tax cuts.

In a rare admission, Finance Minister Nate Horner acknowledged there was some political daylight between him and Premier Danielle Smith when it came to putting Alberta deeper into deficit for the sake of fast-tracking a tax cut.

Alberta’s finances, tied for generations to the steep peaks and sharp valleys of oil and gas prices, are once again plunging deep into deficit, with no immediate relief in sight.

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,