On the heels of a positive 2024 economic outlook by the federal government, the province has announced added growth in its revenue stream for the current budget year.
In his quarterly and mid-year update Nov. 30, Alberta’s finance minister, Nate Horner, said his government is projecting a budget surplus of $5.5 billion, up from its $2.3-billion forecast during the spring budget speech.
“That’s thanks to a significantly higher amount of revenue which is being driven by a number of key factors. Chief among them is our continuing economic resilience,” said Horner.
He added that an earlier projection of a 2.8 per cent rise in the province’s gross domestic product remains in line and touted it, among provinces, as the best in Canada.
“That’s good news, but it’s not unexpected. We’ve added 78,000 new jobs, 68,000 of those are full-time, and our employment growth continues to exceed expectations,” the finance minister said.
According to the latest figures, total revenue for the 2023-24 budget year could top out at just over $74 billion, up almost $4 billion from what was first predicted, and could, according to the province, reach $75 billion in the 2025-26 fiscal year.
Revenue, however, will depend on a number of factors, one of them being the price for a barrel of oil. Hovering at less than $75 a barrel earlier in the week, it will determine whether or not there’s a reinstatement of the current fuel tax relief discount, which ends Dec. 31. Premier Danielle Smith has set $80 as a benchmark for its return.
It also comes at a time where Pincher Creek has one of the lowest per-litre prices in Alberta.
“It potentially could [hurt or hamper] revenue projections [reinstating the relief program],” said Horner, to a question from Shootin’ the Breeze, following his update.
“It would be offset by an increase in oil revenue that would outweigh it, but we would still be net positive. But, it would have an impact.”
With a large migration from other provinces and countries, like Ukraine, the government will also be relying on other revenue streams like new construction, albeit having a sluggish start since the pandemic, which the finance minister attributed to rising interest rates and, at one point, an apparent supply chain issue.
“Very pleased, though, to see housing starts last month at historic highs in Alberta,” said Horner in a followup response. “So, the market is responding to the call. Really nice to see and I hope it continues.”
With slightly more than 4.75 million people calling Alberta home at the beginning of this month, most analysts speculate that number will easily reach the five-million mark by 2025.
While the government is revealing new revenue in its forecast outlook, the fiscal update also did include an adjustment in its expenses for 2023-24. It’s now saying it could spend upwards of $68.8 million, a $481-million increase.
Part of that increase, though, can be linked to the 2023 wildfire season. It’s estimated the province has or will have spent, once the numbers are finalized, $1.2 billion in disaster and emergency costs.
By Dave Lueneberg, Local Journalism Initiative Reporter
Original Published on Dec 07, 2023 at 09:11