Natural gas and oil prices will stay weak for at least another year, the Alberta government predicted Thursday.

The provincial budget forecasts that gas will average C$2.94/gigajoule (GJ) (US$2.47MMBtu) and oil will stick at US$55/bbl for fiscal 2015-2016, which starts April 1.

Finance Minister Robin Campbell raised hope that a recovery will be under way a year from now but emphasized that improvement is no sure bet, calling even his modest long-range expectation a “target” rather than a projection.

The official hopes for Alberta gas are a slow recovery to C$3.17/GJ (US$2.66/MMBtu) in fiscal 2016-2017, C$3.44/GJ (US$2.89/MMBtu) in 2017-2018, C$3.53/GJ (US$2.96/MMBtu) in 2018-2019 and C$3.64/GJ (US$3.06/MMBtu) in 2019-2020.

Campbell’s targets for West Texas Intermediate (WTI) oil are US$62.80/bbl in fiscal 2016-2017, US$75.14/bbl in 2017-2018, US$78.89/bbl in 2018-2019, and US$83.83/bbl in 2019-2020. The counterpart for Canada’s best light crude production, Edmonton Par, tracks WTI closely with allowance for currency fluctuations.

For the growing majority of Alberta production that comes from the oilsands as discount-priced bitumen — in a blend diluted for pipeline shipments known as Western Canada Select (WCS) — Campbell forecasts C$46/bbl (US$36.80/bbl) in fiscal 2015-2016.

The longer-range provincial targets for WCS are C$51.12/bbl (US$40.90/bbl) in 2016-2017, C$61.77/bbl (US$49.42/bbl) in 2017-2018, C$65.76/bbl (US$52.60/bbl) in 2018-2019, and C$74.23/bbl (US$59.38/bbl) in 2019-2020.

WCS prices are complex calculations, registering variable conditions on a sub-market that generates a gyrating “differential” for low-grade heavy crude, which has historically been a discount at times exceeding 30%.

But for the Alberta government treasury, the nub of current and anticipated gas and oil market conditions has been simple: a body blow that has dried up royalties from leases of provincially owned resources.

By area, the government holds 81% of all deposits. By energy content, the total nudges 100% because virtually all the oil sands are provincial public property.

The royalty regime makes the government the worst victim of market slumps. A system of sliding scales deals out double blows. When prices drop, not only does the total revenue pie shrink. The sizes of the provincial treasury’s pieces — the royalty percentage rates — also shrivel.

In fiscal 2015-2016, the finance minister expects Alberta gas royalties to fall to C$450 million (US$360 million) — 53% less than C$960 million (US$768 million) in 2014-2015, and down by 95% since they were the province’s top revenue source at C$8.4 billion (US$6.7 billion) 10 years ago.

On crude flowing from wells, provincial royalties are projected to drop by 73% to C$594 million (US$475 million) in fiscal 2015-2016 from C$2.2 billion (US$1.8 billion) in 2014-2015.

On bitumen produced by mining and thermal extraction from the oil sands, the treasury expects its royalty revenue to shrink by 72% to C$1.4 billion (US$1 billion) in fiscal 2015-2016 from C$5 billion (US$4 billion) in 2014-2015.

The Alberta plan for dealing with the evisceration of royalties highlights a difference between the province’s ruling Conservatives and their counterparts in the United States.

The heartland of the Canadian political right is raising taxes, and not just temporarily.

The new budget — in a province that is often called the Texas of Canada but does not always live by the label — embarks on a promised 10-year program of financial reform. The scheme is avowedly intended to bring a permanent end to reliance on gas and oil revenue windfalls for operating funds since a 1947 gusher launched the modern Alberta petroleum industry.

The program includes a 1.5-point increase over three years in the province’s flat-rate personal income tax to 11.5%for high annual earners of C$100,000 (US$80,000) or more. Albertans in the top bracket of C$200,000 (US$160,000) or more will also pay a surcharge of an additional 0.5 points for three years.

As of fiscal 2018-2019 the increased taxes are forecast to extract additional revenues of C$730 million (US$584 million) a year from the high earners in the provincial population of four million.

Another C$695 million (US$556 million) per year in new revenue will be raised with increased gasoline, diesel, liquor, and tobacco taxes. The majority of the cash will come from the provincial fuel tax increase to C$0.13 per liter (US$0.38 per U.S. gallon) from C$0.09 (US$0.27/U.S. gallon).

Health care — the province’s largest single expense, free to all residents, and wholly financed with gas and oil royalties for the past eight years — is also being injected into the tax hike package, in a revival of bygone public medical insurance premiums.

All Albertans with annual incomes exceeding C$50,000 (US$40,000) will pay up to C$1,000 (US$800) a year for health care coverage — a charge forecast to generate C$530 million (US$424 million) annually as of fiscal 2016-2017.

As consolation, the Alberta Conservatives calculate they still run the lowest-taxed Canadian jurisdiction, saying residents and companies will still pay more than $10 billion less than they would in any other province.

In his budget address to the Alberta legislature, Campbell acknowledged, “In the past, strong resource prices masked the fundamental stresses and cracks in our financial foundation. Our over-reliance on volatile resource revenue to pay for the needs of today meant that stable revenues — such as taxes and fees — haven’t kept pace with our growing expenses.”

The finance minister said, “To put it in a household context, our weekly paycheck has not been covering our day-to-day expenses. We have been lucky in recent years that resource revenues provided a bonus that allowed us to pay the bills. But as many Albertans who work in the oil and gas sector already know, there will be no bonus this year, and for some there might not even be a weekly paycheck.”

Alberta’s ruling Conservatives drew the line at raising corporate income taxes, however: “There have been significant layoffs in our economy already; we don’t want to make the situation worse,” Campbell said. “So we are holding the line on corporate taxes so that corporations will keep existing jobs here in Alberta, not move them to some other province or some other country.”

The effects of soft gas and oil prices have spread into corporate income tax revenues. The provincial treasury’s corporate tax take is forecast to drop by 21% to C$4.5 billion (US$3.6 billion) in fiscal 2015-2016 from C$5.7 billion (US$4.6 billion) in 2014-2015. A gradual recovery is forecast as gas, oil and industrial construction regain strength and other sectors such as agriculture and manufacturing grow.