Alberta’s financial picture is much rosier than just a few months ago but local MLAs say it’s not time to open the coffers.
A boost in revenues from oilsands and corporate taxes helped the province post a deficit of $1 billion for the 2009/10 fiscal year. The government had budgeted for a $4.7-billion deficit last year then predicted a deficit of $3.6 billion at its most recently quarterly update, released three months ago.
“It’s the same old situation with Alberta’s revenues. They’re so unpredictable,” said St. Albert MLA Ken Allred.
The province took in $4.8 billion in corporate income tax last year, $2.3 billion higher than budgeted.
While low natural gas prices cost Alberta $2.2 billion in royalties, the decline was offset by an extra $2.2 billion from oilsands and $600 million more from conventional oil.
These numbers show that Alberta is successfully replacing dwindling natural gas revenue with increasing oilsands revenue, Allred said.
“Oilsands revenues I think are much more predictable and they’re going to be growing,” Allred said.
The province also took in an extra $1.6 billion in investment income, led mainly by the Heritage Savings Trust Fund.
Overall, revenues were $4 billion higher than budgeted. Expenses were $303 million higher than budgeted. Higher disaster and emergency expenses were partly offset by lower operating expenses.
The government has been working hard to find efficiencies within its departments and plans to continue with balanced spending, said Spruce Grove-Sturgeon-St. Albert MLA Doug Horner.
“There’s always pressure on the government to spend. That never stops,” he said. “We’re going to maintain the course because we do have a plan to be back in the black.”
Finance Minister Ted Morton isn’t expecting an improvement to the forecast deficit of $4.7 billion for 2010/11, due to high uncertainty of commodity prices, financial markets and the Canadian dollar.
The government’s fiscal health relies more on good luck than good planning, charged NDP leader Brian Mason.
“When the price of oil or natural gas falls, teachers get laid off,” he said. “Albertans want certainty and predictability in the provincial budget. This government won’t achieve that unless it diversifies its finances.”
The Alberta Liberals said the government was glossing over the fact that it took in an extra $181 million in education property taxes.
“This money would undoubtedly ease the pressure on Alberta’s school boards if the government would actually use it for schools,” said finance critic Hugh MacDonald.
