This appendix exists so that the twenty-year scenarios in Part V can be checked rather than taken on trust. Nothing in Parts I to IV depends on it. The model is deliberately simple: two rules generate revenue, three rules generate spending, and the surplus is the difference. Every figure in Table 20 and Table 21 can be rebuilt from what follows.
J.1 Base year and units
The projection starts from the conservative end of the Day 1 ledger: total revenue of C$129.1 billion, of which C$13.2 billion is resource royalties, leaving C$115.9 billion of non-resource revenue. Recurring spending starts at C$105.7 to C$106.9 billion, being the C$96.9 billion of existing and replacement spending plus C$8.8 to C$10.0 billion of sovereign-function allowances. All amounts are constant dollars; energy prices are constant 2025 United States dollars as set out in Table 18. The horizon is twenty years, 2026 to 2046.
J.2 Rule one: resource royalties
Royalties scale with production at a given price path. At the reference price path each million barrels a day of oil and bitumen produces about C$5.00 billion of royalty a year; at the higher price path, about C$8.64 billion. The step from C$5.00 to C$8.64 is larger than the price step itself, which reflects the way Alberta’s royalty formulas take a rising share as prices rise above cost. Production volumes are the ones set out in Table 19: 4.4, 4.9 and 7.0 million barrels a day.
J.3 Rule two: everything else
Non-resource revenue — personal and corporate income tax, consumption taxes, fees, investment income and the rest — grows from the C$115.9 billion base at a single compound rate for each case. Those effective rates are 2.25 per cent a year on the Current Path, 3.02 per cent under Competitive Growth and 3.62 per cent under the High-Growth Build-Out. They are higher than the non-energy real growth rates in Table 19 because energy-sector activity also feeds the wider tax base. Under the higher price path, non-resource revenue is lifted a further 5 per cent, reflecting the income and activity that stronger prices generate outside the royalty line itself.
| Case and price path | Production | Royalty rate | Royalties | Non-resource revenue | Total revenue |
|---|---|---|---|---|---|
| Current Path, reference | 4.4 | 5.00 | 22 | 181 | 203 |
| Current Path, higher | 4.4 | 8.64 | 38 | 190 | 228 |
| Competitive Growth, reference | 4.9 | 5.00 | 25 | 210 | 235 |
| Competitive Growth, higher | 4.9 | 8.64 | 42 | 220 | 262 |
| High-Growth Build-Out, reference | 7.0 | 5.00 | 35 | 236 | 271 |
| High-Growth Build-Out, higher | 7.0 | 8.64 | 60 | 248 | 308 |
Production is million barrels a day of oil and bitumen; the royalty rate is C$ billions of royalty per million barrels a day. Royalties are production multiplied by the rate in the third column. Non-resource revenue is C$115.9 billion compounded for twenty years at the case rate, plus 5 per cent on the higher price path. Total revenue is the sum of the two. Components are rounded independently, so a row may differ from the displayed sum by C$1 billion.
J.4 The three spending rules
Spending does not depend on the price path, only on the case and on which growth rule is applied. The first rule grows spending with population alone, which holds real spending per person flat. The second adds roughly half a percentage point a year on top of population, which is closer to the historical behaviour of Canadian provincial budgets. The third grows spending with the economy, so government keeps a constant share of a larger output. The third is the most demanding and is the reason the High-Growth case does not produce the largest surplus in every column.
| Spending rule | Current Path | Competitive Growth | High-Growth Build-Out |
|---|---|---|---|
| Grows with population | 138 | 140 | 141 |
| Population plus about half a point | 155 | 157 | 158 |
| Grows with the economy | 159 | 186 | 208 |
| Series | Current Path | Competitive Growth | High-Growth Build-Out |
|---|---|---|---|
| Non-resource revenue | 2.25 | 3.02 | 3.62 |
| Spending, population rule | 1.31 | 1.39 | 1.42 |
| Spending, population plus | 1.90 | 1.97 | 2.00 |
| Spending, with the economy | 2.03 | 2.84 | 3.41 |
Rates are the effective compound rates the model produces between the base year and 2046, calculated on a spending base of about C$106.3 billion. The population rule implies an Alberta population of roughly 6.6 million in 2046, consistent with the provincial projection at [AB-POP].
J.5 What the model does not contain
- no federal debt-and-asset settlement, in either direction;
- no currency effect, in either direction;
- no behavioural response to tax policy, and no migration or growth dividend;
- no technology breakthrough, and no new market access beyond the production volumes stated in Table 19;
- no Heritage Fund drawdown, and no compounding of the fund beyond the investment income already inside the base year; and
- no recession. The model runs a smooth path for twenty years, which no real economy does. Part I, not Part V, is where the downside is tested.
J.6 How to check any figure
Take the production volume for the case from Table 19 and multiply by the royalty rate in Appendix Table J1. Take C$115.9 billion, compound it at the case rate in Appendix Table J3 for twenty years, and add 5 per cent if the higher price path is being used. Add the two for total revenue. Subtract the spending figure from Appendix Table J2 for whichever spending rule is being applied. The result is the surplus shown in Table 20 and Table 21, within the rounding of the displayed components.
Two cautions belong with any use of these numbers. The scenarios are bounds, not forecasts, and the High-Growth Build-Out is explicitly an upside boundary rather than a plan. And a twenty-year projection compounds its own assumptions: a difference of half a percentage point a year in either revenue or spending moves the 2046 result by more than C$10 billion. Readers should place far more weight on the Day 1 ledger in Part I and the sensitivity analysis in Section 4 than on any single 2046 figure.
J.7 How the rates were calibrated
The coefficients in this appendix are not independent forecasts, and it matters that readers know it. They are the effective rates implied by the scenario outputs published in Part V: each was recovered by solving the 2046 figures back to the base year, then run forward again to confirm that it reproduces every published figure. They describe the scenarios; they were not estimated separately and then used to generate them.
- The royalty coefficients of C$5.00 and C$8.64 billion per million barrels a day are the ratio of scenario royalty revenue to scenario production at each price path. The step between them is wider than the price step because Alberta’s royalty formulas take a rising share as prices rise above cost.
- The non-resource growth rates of 2.25, 3.02 and 3.62 per cent a year are the compound rates that carry the C$115.9 billion base to the published 2046 non-resource totals over twenty years.
- The 5 per cent higher-price uplift is the difference between the two price paths at constant production, applied to non-resource revenue only.
What this means in practice. A reader can check every published figure from these rules, which is the purpose of the appendix, but should not treat the rates as evidence for the scenarios — they are a restatement of them. The independent evidence for the growth cases is in Part V and Appendix H. And the rates are sensitive: half a percentage point a year on the non-resource rate moves the 2046 result by more than C$10 billion. That sensitivity is why the weight of this paper rests on the Day 1 ledger in Part I and the seven-shock analysis in Section 4, not on any single 2046 figure.
