While all eyes looked to Alberta’s fiscal future in the 2012 budget this week, the government also reported a rosier than expected present in its third quarter fiscal update.
The latest projections forecast the government will end the fiscal year in March with a deficit of $1.3 billion. That number is much better than the $3.4 billion the province initially projected in a budget a year ago and better than the $3.1 billion in the red the government saw at the halfway mark last fall.
The turn-around comes mostly from better sales of Crown land, which brought in $2.2 billion more than what the government expected.
Expenses are also up from what the budget initially projected with most of that increase coming from higher disaster costs, mostly from the Slave Lake fire, of about $595 million.
Local MLA and treasury board president Doug Horner said he is pleased to see the province’s fiscal picture improving. On the land sales however, he said the government is aware the good times won’t go on forever when it comes to land sales.
Horner noted in the 2012 budget it is one area where the government does not see any future growth.
“It is one of the revenue areas that is actually decreasing as opposed to increasing.”
The province’s savings account also had a rebound in the last part of the year. In the first half of the fiscal year the fund actually lost value as stock markets were hit hard. This quarter, however, markets turned around and the fund did a lot better, bringing in slightly more than $300 million in interest, which, after adding in the losses from the first part of the year gave it an increase of $183 million.
Horner said it was a good sign for the province and the economy to have the fund return to growth.
“Those numbers have turned around as have the markets.”
The fund is now valued at $15.4 billion. Currently the interest gained is put into the government’s revenues and used to pay for programs.
Horner said part of what he hopes to do in the year ahead is talk with Albertans about how best to manage the fund and whether the government should be growing it.
“That is one of the reasons why we want to have that conversations with Albertans.”
