The Alberta government’s financial picture is about as gloomy or rosy as it was at budget time.
The province is on pace to post a $4.76-billion deficit by the end of this fiscal year. This projection is $7 million more than predicted at budget time this past spring.
The province took in $602 million more revenue than expected in the first quarter, which ended June 30, but also saw expenses rise by a similar amount — $609 million. On the revenue side, the bulk of the increase comes from the sale of land leases to the oil and gas sector, said Finance and Enterprise Minister Ted Morton Wednesday. The province has also experienced stronger corporate tax revenue but lower personal income tax and investment revenue.
Expenses rose mainly because of disaster and emergency funding for municipal flooding, wildfires, the agricultural sector and mountain pine beetles, Morton said.
He noted that Alberta’s coffers are being affected by continued economic uncertainty, faltering markets, a rising Canadian dollar, lower natural gas prices and fluctuating oil prices.
“The message for Alberta is clear, we need to exercise caution because global volatility can directly impact our bottom line,” Morton said. “We are an export-based economy so what happens in the global economy affects us here at home.”
The province will use its sustainability fund to cover the deficit. The fund is projected to end the year with $11.2 billion in value.
“The good news here is that there is no new net debt,” Morton said.
Alberta Liberal critic Hugh MacDonald said that the $34 million in projected revenue should be enough to pay for the programs Albertans want without dipping into the sustainability fund.
“If the government would reduce the size of cabinet and commit to value-for-money audits on privatized road maintenance contracts, information technology contracts, and the farm fuel benefit — just to name a few multi-million expenditures — we’d be much closer to a balanced budget,” MacDonald said.
