A first-quarter fiscal update released last Thursday projects that Alberta is headed for a $2.4 billion surplus this fiscal year, but St. Albert MLAs are divided on how surplus spending should be managed and why they believe province has a surplus at all.
The surplus comes despite a slight drop in the price of oil, and it is being driven in part by increased corporate and personal income tax revenues and an increase in Alberta’s population, the report shows.
“My takeaway is that our plan is working,” said Dale Nally, UCP MLA for Morinville-St. Albert and minister of Service Alberta and red tape reduction. “We said we’d have lowest corporate taxes in Canada and business would come, and the proof is in the numbers.”
The UCP framework for surplus spending requires that half of the surplus money go to lowering Alberta’s debt and the other half to the newly created Alberta Fund.
Alberta Fund money can be spent on additional debt repayment, increased contributions for the Alberta Heritage Savings Trust Fund and one-time initiatives that don’t lead to permanent increases in government spending.
“My answer to the question of where do I prefer it to go? I’m listening to my constituents,” Nally said. “I know some residents want it to go to debt repayment, others want it to go to the Heritage Savings Trust Fund and others are looking for one-time investments. I’d say to Albertans: send me an email, phone me, let me know where you want this money to go.”
The report also revealed that the province this summer spent three-quarters of its $1.2 billion contingency fund dealing with wildfires, raising concerns that the province may need to invest more to prepare for worsening climate change impacts.
“What we need to do is continue down the path of having the most responsibly produced energy in the world,” Nally said. “We know the oil that comes from Alberta is not just responsibly produced, but also has a lower carbon footprint than other jurisdictions. This tells me more than ever it’s important we get our resources to market.”
NDP MLA for St. Albert Marie Renaud said she believes that the surplus has little to do with UCP policy and more to do with the party’s good fortune to inherit overall high oil prices.
“I think what wasn’t in that update was the cost of the current healthcare crisis,” Renaud said. “The other thing is the moratorium on renewables that were ready to go — that’s like $33 billion in jobs…. These things make me question whether this is as large as they suggest it is, is the picture as rosy as they suggest.”
The report doesn’t include expenses from the government’s purchase of medical lab company Dynalife.
Renaud also questioned whether the UCP’s plan to invest surplus money into the Alberta Fund was sufficiently transparent.
“Will it be lobbyists determining where that one-time spending is happening, or will it be Albertans that get to weigh in on what their priorities are and what they need?” she said. “There’s not a lot of faith in the UCP’s ability to govern for what’s best for all Albertans as opposed to what’s best for them and their friends.”
The full 2023-2024 first quarter fiscal update and economic statement is available on the Government of Alberta’s website.
