Alberta forecasting $5.5 billion surplus in 2023-24

He added, “Our second-quarter fiscal update is another positive report, showing strength in Alberta’s finances and economy and positioning us for future growth and prosperity.”

The government said Alberta’s fiscal outlook continued to see improvement in the second quarter of 2023-24, boosted by strong bitumen royalties and higher income tax revenues.

Officials did note, however, that volatile oil prices, inflation challenges and uncertainty due to slowing global growth could impact Alberta’s finances going forward.

REVENUE

The province is forecasting revenue for 2023-24 at $74.3 billion, an increase of $3.7 billion from Budget 2023. Officials said that increase is due to jumps across various revenue streams.

Additionally, the price of West Texas Intermediate (WTI) is forecast to average US$79 per barrel over the fiscal year, in line with the Budget 2023 forecast.

Personal and corporate income tax revenue is forecast at $21.8 billion, with bitumen royalties forecast at $14.4 billion and overall resource revenue forecast at $19.7 billion.

The government noted that starting in 2024, it will continue to offer fuel tax relief when oil prices are elevated, even as the province transitions back to the original fuel tax relief program, which is based on average quarterly oil prices.

EXPENSE

For 2023-24, expense is forecast at $68.8 billion, an increase of $481 million from the 2023 Budget.

For the current fiscal year, $1.2 billion in disaster and emergency costs are forecast, including:

$750 million to fight wildfires in the province
$165 million for AgriRecovery to support livestock producers impacted by dry conditions
$253 million to province financial assistance to communities for uninsurable damage from spring wildfires and summer flooding
$61 million for evacuation and other support

The operating expense forecast has gone up by $319 million, which includes an additional”

$301 million for Health
$48 million for Advanced Education
$48 million for Energy and Minerals
$33 million for Mental Health and Addiction
$30 million for Education
$14 million for Indigenous Relations
Offset by decreases of $187 million for lower-than-expected program take-up of affordability payments and re-profiling of TIER spending to 2024-25

ALBERTA HERITAGE SAVINGS TRUST FUND

The Alberta Heritage Savings Trust Fund’s market value on September 30, 2023 was $21.4 billion, up from $21.2 billion reported at March 31, 2023.

ALBERTA FUND

Money in the Alberta Fund can be utilized for additional debt repayment, the Heritage Savings Trust Fund, or one-time initiatives that do not permanently increase government spending.

The Alberta Fund contribution for 2023-24 is forecast at $1.6 billion.

ECONOMIC OUTLOOK

The government noted that Alberta’s real gross domestic product (GDP) is anticipated to grow 2.8 per cent in 2023, in line with the forecast in Budget 2023.

NDP RESPONSE

Following the presentation of the mid-year update, Samir Kayande, the Alberta NDP Critic for Finance (Fiscal Responsibility) has issued a response.

Kayande stated that the fiscal update “uses nothing from high resource revenues to help everyday Albertans struggling with the increased costs due to this government’s choices. All the Finance Minister could really offer Albertans was a pledge to hope for a lot of good years.”

He argued that “hope is not a strategy.”

Kayande said, “Hope does not help pay the bills, keep the lights on, or put food on the table. We need a government that has an actual plan to improve the lives of everyday Albertans who are struggling to make ends meet, and thus far, the UCP has failed to deliver.”

The rest of Kayande’s response is as follows.

“Under the UCP, Alberta has repeatedly experienced the lowest wage growth in the country, and wages today are not keeping pace with inflation, effectively reducing everyday Albertans’ purchasing power.

The Finance Minister has touted a growing economy and increased rates of migration, yet those who answered the call arrive here and realize they are unable to find a place to live, afford their basic necessities, or access public services in a timely way.

Many Albertans are facing a harsh reality: we have the highest rate of food bank usage in the country, we’ve seen the highest spike in electricity prices this year, and in Calgary alone, 115,000 individuals are on the brink of homelessness. Despite a growing population, the UCP is predicting fewer housing starts than initially promised, which only inflates rental rates and worsens the housing crisis even more.

The UCP’s economic projections are significantly more optimistic than private sector forecasts. This is truly surprising given the economic damage wreaked by their own policies, including the ban on renewable energy development, enacting the Sovereignty Act, and mulling the nationalization of the electricity sector.

Additionally, Albertans still don’t know the true cost of the UCP’s lab services boondoggle, and apparently, neither does the Finance Minister. When asked, he simply shrugged and said to ask the Health Minister.

In the end, we see the surplus increasing due to oil prices, but Albertans aren’t reaping any of the benefits. We need the government to focus on the issues that everyday Albertans are dealing with here at home.”

READ MORE: Lethbridge News Now.

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by Justin Goulet

Alberta forecasting $5.5 billion surplus in 2023-24

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