Alberta ends latest fiscal year with $3.9B surplus as oil, gas surge

Alberta is back in the black in a big way – turbocharged by high-flying oil prices.

The final number on the 2021-22 fiscal year, which ended on March 31, is a $3.9-billion surplus, Finance Minister Jason Nixon said Tuesday.

It's the first time in seven years the provincial budget sports no red ink on the bottom line and it represents a head-spinning turnaround from the $18.2-billion deficit predicted when the budget was introduced during the throes of the COVID-19 pandemic in February 2021.

Nixon said the goal is to use the windfall to build up the province's $18.7 billion savings nest egg – the Alberta Heritage Trust Fund – while examining further ways to help Albertans get through the current stretch of high inflation.

“Most Albertans have witnessed volatile resource revenues before and dealt with the fallout when governments went right out and spent excessive revenues as soon as they had it,'' said Nixon.

“The fact is what goes up will come down.

“That's why we have focused on savings for the future to reduce the burden of debt to make life more affordable for Albertans.''

Alberta's bread-and-butter oil and natural gas industries have soared in recent months as global economies ramped up while pandemic measures receded and Russia's invasion of Ukraine disrupted worldwide energy supply.

In fact, the money has gushed in so copiously that Alberta managed to save more even as it spent more.

The province spent more than $64 billion in 2021-22 – about $2.5 billion more than originally budgeted due mainly to disaster assistance for drought-ravaged farmers.

Alberta is now almost a quarter of the way into the current 2022-23 budget year, which so far predicts a modest $511-million surplus.

Asked if he thinks the current year's surplus could also end up being much larger, Nixon said he'll have more information on that at the next update in August.

“My officials and my experts are still saying we need a little bit more time before we give that a proper answer,'' he said.

Shannon Phillips, finance critic for the Opposition NDP, said Nixon and the United Conservative Party government, even with the windfall, are failing to deliver on promised funding for a range of public services, from education to ambulance response.

“Hundreds of thousands of Albertans can't find a family doctor. Dozens of rural hospitals are partially closed. Urban emergency rooms are overwhelmed and ambulance wait times are longer than they have ever been,'' said Phillips in a statement.

“Albertans can't trust the UCP when they are worse off in every way despite $100 oil.''

Nixon said the government has launched initiatives to relieve inflationary pressures where possible. The province cut its share of the gasoline tax earlier this spring and $150 in electricity rebates will soon flow to cushion the impact of high prices.

The turnaround in the budget was propelled by $16.2 billion in non-renewable resource revenue – $13.3 billion more than expected at budget.

The budget predicted West Texas Intermediate, the benchmark price for North American oil, to average about US$46 a barrel. Instead, it averaged US$77 and currently hovers around US$110.

That money boosted all the other major line items.

Total revenue was $68 billion, about a third more than budgeted.

Corporate income tax came in at $4.7 billion, more than double what was expected.

Taxpayer-supported debt was expected to be $115 billion but came in at $93 billion. The cost of servicing the debt was $2.3 billion.

Nixon said half the surplus – about $2 billion – came from the government reversing onerous provisions in the contract for the Sturgeon Refinery.

There was $6.6 billion for capital projects: roads, hospitals, bridges, schools, and housing units.

The update comes at a time of flux for the UCP as it prepares for a new leader. Premier Jason Kenney announced last month he was stepping down from the top job after receiving 51 per cent support in a party leadership review.

He is set to leave when a new leader is chosen Oct. 6.

The next budget is slated for the spring, followed closely by a scheduled provincial election on May 29.

© 2022 The Canadian Press

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