Reenergized: Alberta forecasting a $12.3 billion surplus thanks to high oil revenues
High revenue from a rejuvenated energy sector will lead Alberta to surplus of more than $12.3 billion this fiscal year, according to the province.
The number was included in the second quarter fiscal update rolled out Thursday by Finance Minister Travis Toews.
The $12.3 surplus is down $900 million from first quarter projections, but $11.8 billion higher than what was predicted in Alberta's last budget.
And by and large, there's one thing to thank.
ENERGY, RE-ENERGIZED
Non-renewable resource revenue is forecast at $28.1 billion in the 2022-23 fiscal year.
That's a record-setting number, far surpassing the previous high of $16.2 billion in 2021-22.
It comes on the heels of oil prices in the US$100-a-barrel range during the first quarter update. Benchmark West Texas Intermediate has since softened, but remains strong at around US$80 a barrel.
Provincial projections have it at US$91.50 per barrel for 2022-23: US$21.50 more than estimated in the budget.
Personal and corporate income tax also drove up provincial finances, with revenues forecast at $13.3 billion and $6.3 billion, respectively.
SUPPORT
But while the oil and gas industry has experienced an extremely profitable year, many individual Albertans can't say the same.
Affordability is still a significant problem for millions, thanks in part to supply chain issues and worldwide inflation.
Premier Danielle Smith announced a relief package Tuesday that she claims will help those in need.
The $2.4 billion dollar pledge was rejigged in Thursday's fiscal update, bumped up to $2.8 billion.
The roughly $300 million extra is earmarked for the 2024-25 period and should account for long-term changes to benefit and income indexing.
But the majority of the relief announced earlier this week -- including payments to families and seniors and a pause on fuel tax collection -- are slated to only be temporary. Thursday's update hints that the government will not bring in additional inflationary relief measures.
Previously announced payments are set to take hold in January.
INCOMING DROPS
The province says its total revenue currently sits at $76.9 billion, and expenses account for roughly $64.6 billion.
But in the next fiscal year, Albertans can expect to see some differences.
For starters, the province expects to cut roughly $671 million in spending in 2023-24.
Officials say services can be maintained even after inflation because crude-by rail expenses are coming off of the books.
There's another big change that will free up millions.
COVID-19 expenses were over and above regular health expenses during the last few fiscal years.
A government representative tells CTV News that "in 2023-24 and 2024-25, as COVID moves to an endemic state, costs will diminish."
They say any ongoing financial impacts of the pandemic will be evaluated in the government's next update.
RAINY DAY RETHINK
Despite the energy-infused windfall, payments to the Alberta Heritage Fund are being drastically scaled back.
The last budget called for $2.4 billion to be put to that fund. It now looks like only $263 million will be -- that's a drop of $2.1 billion.
A lower-than-expected return-on-investment could be the culprit.
A SURPLUS SURPLUS
The massive surplus, lower expenses and Heritage Fund backtrack could allow the province some spending wiggle room.
Its first plans involve paying down debt by $13.4 billion this fiscal year. That will reduce complete taxpayer-supported debt to $79.8 billion.
But where the rest of the surplus goes is still anyone's guess.
And while energy prices aren't expected to stay this high forever -- the current surplus estimate for 2023-24 is $5.6 billion and $5.3 billion in 2024-25 -- the financial outlook is still a strong one.
The province is expected to table a budget early next year.
CTVNews.ca Top Stories
B.C. tenants evicted for landlord's use after refusing large rent increase to take over neighbouring suite
Ashley Dickey and her mother rented part of the same Coquitlam duplex in three different decades under three different landlords.
Mountain guide dies after falling into a crevasse in Banff National Park
A man who fell into a crevasse while leading a backcountry ski group deep in the Canadian Rockies has died.
Expert warns of food consumption habits amid rising prices
A new survey by Dalhousie University's Agri-Food Analytics Lab asked Canadians about their food consumption habits amid rising prices.
MPP Sarah Jama asked to leave Ontario legislature for wearing keffiyeh
MPP Sarah Jama was asked to leave the Legislative Assembly of Ontario by House Speaker Ted Arnott on Thursday for wearing a keffiyeh, a garment which has been banned at Queen’s Park.
Charlie Woods, son of Tiger, shoots 81 in U.S. Open qualifier
Charlie Woods failed to advance in a U.S. Open local qualifying event Thursday, shooting a 9-over 81 at Legacy Golf & Tennis Club.
Ex-tabloid publisher testifies he scooped up possibly damaging tales to shield his old friend Trump
As Donald Trump was running for president in 2016, his old friend at the National Enquirer was scooping up potentially damaging stories about the candidate and paying out tens of thousands of dollars to keep them from the public eye.
Here's why provinces aren't following Saskatchewan's lead on the carbon tax home heating fight
After Prime Minister Justin Trudeau said the federal government would still send Canada Carbon Rebate cheques to Saskatchewan residents, despite Saskatchewan Premier Scott Moe's decision to stop collecting the carbon tax on natural gas or home heating, questions were raised about whether other provinces would follow suit. CTV News reached out across the country and here's what we found out.
Montreal actress calls Weinstein ruling 'discouraging' but not surprising
A Montreal actress, who has previously detailed incidents she had with disgraced Hollywood producer Harvey Weinstein, says a New York Court of Appeals decision overturning his 2020 rape conviction is 'discouraging' but not surprising.
Caleb Williams, Jayden Daniels and Drake Maye make it four NFL drafts with quarterbacks going 1-3
Caleb Williams is heading to the Windy City, aiming to become the franchise quarterback Chicago has sought for decades.