Alberta’s budget came out of the red and predicts a bright economic future

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Seven years have passed since the province’s last balanced budget and the surplus represents a dramatic turnaround from recent budgets that were awash in staggering multi-billion dollar deficits.

Toews said Alberta’s economy will fully recover from the contraction that began in 2014 and the province will lead the country in economic growth.

Soaring oil and gas revenues are the main driver, but years of belt-tightening and a diversified economy also played a big part, he said on Thursday.

“Without the flattening of this operating expense curve, we wouldn’t be presenting a balanced budget today.”

The projected surplus is another huge pendulum swing for a province that for decades has been riding the skyrocketing highs and subterranean lows of oil and gas prices.

Case in point: A year ago, Toews forecast a deficit of $18.2 billion for the fiscal year ending March 31. The deficit is now expected to be a small fraction of that amount: $3.2 billion.

The United Conservative government expects to take in $13.8 billion from non-renewable energy this year, which would make it the second highest catch on record. Tar sands royalties alone would be $10 billion.

West Texas Intermediate, the benchmark price for North American oil, was trading above US$92 a barrel on Thursday. The province forecasts a more modest average of $70 per barrel over the coming year, falling into the mid-$60 range in subsequent years.

“We use, I would say, credible but conservative energy projections,” Toews said.

When asked if Alberta is staying on the energy price roller coaster, he said, “What I can say with confidence is that today we have a much more sustainable fiscal reality. four years ago.”

The budget calls for $62.6 billion in total government revenue offset by $59.4 billion in base spending. This is before additional Covid-19 spending and money to offload canceled rail contracts to transport crude signed by the previous NPD government.

The debt borne by taxpayers is expected to amount to $94.7 billion. Debt service charges are expected to rise slightly to $2.7 billion.

Despite the improved results, the Province expects debt to grow over the next two years to fund commitments to create jobs, grow the economy and build health care capacity.

The budget adds $600 million to the health operating budget, a commitment that will grow to $1.8 billion in 2024-25.

The money will be used to finance new intensive care beds, places in hospitals, the expansion of laboratories and hospitals and to help recruit more doctors and nurses, in particular to fill vacancies in the regions. rural and remote.

Waves of Covid-19 patients strained hospitals and emergency departments and pushed the system to the brink of collapse during the fourth wave late last year.

Premier Jason Kenney said the pandemic underscores flaws in a system in which Alberta pays relatively more for health care but gets less in terms of per capita bed space and other services. The extra money is intended to correct this disparity.

The province also plans to address labor market gaps.

The government aims to invest $72 million over the next three years to expand charter schools and college programs to increase opportunities in science, high tech, engineering, math and trades.

There is to be $171 million over three years to create 7,000 new post-secondary spaces in high-demand fields, including computer and data science, finance, agricultural sciences, health and aviation.

The opposition NDP said the budget must address the immediate concerns of working families.

NDP Leader Rachel Notley said the province’s bottom line may be better, but the benefits aren’t flowing to ordinary Albertans. She said Kenney’s previous inflation de-indexing changes increased tax payments for families and reduced supports for the most vulnerable.

Notley also said UCP policy changes have resulted in exorbitant electricity and utility bills, high insurance premiums and higher costs for school, tuition and even camping. .

The budget promises rebates on natural gas bills to consumers. A utility refund will be triggered if gasoline prices rise above $6.50 per gigajoule.

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