The Alberta government is forecasting a $12.3-billion surplus for 2022-23, according to its mid year fiscal update. The province will also save $13.3 billion because of debt repayment.
The surplus is $1 billion shy of the first quarter fiscal update estimate due to softening oil prices and demand.
But high oil and gas prices contributed to a total revenue of $76.9 billion, or $1 billion higher than the first quarter fiscal update and $14.3 billion higher than the budget estimate.
Alberta Premier Danielle Smith said she promised to balance the budget so Albertans aren’t on the hook for rising debt while showing compassion to Albertans in need.
“We remain focused on doing everything we can to make life more affordable for every Albertan, and to strengthen the economy through jobs and diversification to provide opportunities, prosperity and freedom to all Albertans and families,” she said in a statement.
Finance Minister Travis Toews said the government’s disciplined fiscal approach combined with a focus on investment attraction, economic growth and improved commodity prices has resulted in material surpluses.
“This is good news for Albertans, as it allows for a timely response to the affordability crisis many of our families are facing,” he said in a statement.
“In the face of a potential global recession, Albertans can rest assured our province is in the best position possible as a result of our focus on responsible fiscal management over the last three years.”
Taxpayer-supported debt is forecast to be $79.8 billion on March 31, which includes $13.3 billion in savings following significant debt repayment. The government also said it will commit $10.8 billion over the next three years to savings and debt reduction.
The update forecast $19.4 billion bitumen royalties this year, $6.3 billion of corporate income tax revenues, and $13.3 billion from personal income taxes.
Indexing personal income taxes and the government’s pause in collecting fuel tax have offset some of the increase in revenue. Former Alberta premier Jason Kenney first stopped the fuel tax in April, but it was partially reinstated in October once oil prices relaxed.
The province’s expenses are forecast at $64.6 billion, $1.9 higher than the first quarter fiscal update and $2.5 billion higher than estimated at budget.
Earlier this month, Ontario revealed it expects a budget deficit of $12.9 billion for the 2022-2023 fiscal year, $7 billion less than it forecast in April’s budget.
In a broadcast to the province on Tuesday night, Smith announced a $2.4 billion package for struggling families. That includes $600 for families and seniors every six months, another six months of fuel tax relief, and re-indexed social benefits among a host of other announcements.
The premier said her latest move was just the first step, and there is much more to do.
“I will ensure every decision our government makes from now until this crisis is over balances affordability for Albertans with the need for continued balanced budgets and fiscal responsibility,” she said.