Third quarter brings improvement to government finances

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Alberta will run a deficit of $3.6 billion for the current fiscal year, based on updated third quarter data made public along with the spring budget. The third quarter of the government’s fiscal year ended Dec. 31.

In its spring budget last year the province predicted a $4.7 billion deficit for the year. That swelled to $6.9 billion after the first quarter and dropped to $4.3 billion after the second. The improvement to $3.6 billion is due mainly to higher than forecast revenue, with a large part of the increase coming from investment income.

The past year has seen record returns for the Heritage Savings Trust Fund, which suffered dramatic losses the previous year due to the worldwide economic downturn. The Heritage Fund is expected to bring income of $2.2 billion this fiscal year after losing $2.5 billion last year.

In the first nine months of the current fiscal year, Alberta realized $2.6 billion in investment gains, compared to losses of $1.4 billion during the same period last year.

The fund’s forecast value for the beginning of 2010/2011 is $14.7 billion.

The current fiscal year has also seen more royalty income from oilsands and conventional oil but less revenue from natural gas.

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