Finance Minister Travis Toews provided the Q1 update on the 2021-22 budget on Tuesday (Photo: Chris Schwartz / Government of Alberta)

By Canadian Press

Q1 Budget Update

Alberta halves projected budget deficit to $7.8B; credits global boost in oil demand

Aug 31, 2021 | 10:37 AM

New numbers show Alberta’s bottom line is on track to look better this fiscal year, but the province remains mired in a deep ditch of red ink.

Finance Minister Travis Toews says this year’s deficit is projected to be $7.8 billion, less than half of the $18.2 billion projected in the 2021-22 budget in February.

Taxpayer-supported debt is projected to reach nearly $106 billion by next March, with debt interest payments pegged at $2.6 billion.

The government credits the turnaround to an ongoing economic recovery from COVID-19 and to a rebound in the energy sector.

West Texas Intermediate, the benchmark price for oil, was expected to fetch US$46 a barrel in the budget, but has been rising sharply and is expected to average more than US$65 a barrel this year.

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“After a historically challenging year, Alberta’s economy is already witnessing signs of recovery and growth,” said Toews.

“We know there is still more to do to create jobs and restore Alberta’s place as the economic driver of the nation. We will continue to bring spending in line with that of other provinces, attract more investment and get Albertans back to work.”

The government says there has been a worldwide resurgence in oil demand along with price restraint by the oil cartel OPEC.

The province’s updated revenue forecast for 2021-22 is $55 billion, $11.3 billion higher than reported in the budget tabled in February.

(The Canadian Press)