Province forecasts increased budget surplus

By Al Beeber - Lethbridge Herald on November 22, 2024.

LETHBRIDGE HERALDabeeber@lethbridgeherald.com

The Alberta government said Thursday it is forecasting a budget surplus of $4.6 billion at the end of the 2024-25.

That is up from the $2.9 billion first quarter forecast. The province says the difference is due mainly to higher revenue from personal income taxes and non-renewable resources.

With more than 450,000 people moving to Alberta in the last three years the government has allocated hundreds of millions of dollars to address ongoing resource volatility, geopolitical instability and other pressures, it said in a news release on Thursday.

“These are challenging times, but I believe Alberta is up to the challenge. By being intentional with every dollar, we can boost our prosperity and quality of life now and in the future,” said Nate Horner, President of Treasury Board and Minister of Finance.

The province says it has made key investments to support Albertans midway through the 2024-25 fiscal year including:

• $716 million to Health for physician compensation incentives and to help Alberta Health Services provide services to a growing and aging population.

• $125 million to address enrollment growth pressures in Alberta schools.

It has also provided $847 million in disaster and emergency assistance.

The forecast for the price of oil has been adjusted to $74 US per barrel of West Texas Intermediate and the province expects to earn more for Alberta crude with “a narrowing of the light-heavy differential around US$14 per barrel, higher demand for heavier crude grades and a growing export capacity through the Trans Mountain pipeline. Despite these changes, Alberta still risks running a deficit in the coming fiscal year should oil prices continue to drop below $70 per barrel.”

The province is expecting the population growth to slow to 2.5 per cent next year, down from what it calls a 4.4 per cent surge in the 2024 census year. That growth forecast is lower than the first quarter forecast of 3.2 per cent because of reduced immigration and non-permanent resident targets by the federal government.

The Opposition NDP said in a statement that while the update shows the government is doing well “average Albertans aren’t.”

Shadow Minister of Finance Court Ellingson stated “Albertans are growing tired of the Premier’s so-called economic strategy which appears to be built on high unemployment rates, high inflation rates, and rock-bottom minimum wage.

“The fiscal update shows natural gas production down along with weakness in agriculture, manufacturing, and other sectors. Oil prices have been more reliable recently, but this is because the gap between Alberta’s oil price and the world oil price is narrowing -a direct result of Rachel Notley getting a pipeline built.

“The UCP needs to prioritize diversifying our economy to ensure we’re not always on a royalty rollercoaster,” added Ellingson.