(Edmonton) Alberta’s budget came out of the red. He predicts a bright economic future, with significant spending on hospitals, health care and programs to fill labor shortages.
Posted at 10:10 p.m.
Finance Minister Travis Toews said the 2022 budget forecast a surplus of 500 million, with small surpluses expected in subsequent years.
Seven years have passed since the province’s last balanced budget and the surplus represents a dramatic turnaround from recent budgets that were awash in multi-billion dollar deficits.
Toews says Alberta’s economy will fully recover from the recession that began in 2014 and the province will lead the country in economic growth.
Soaring oil and gas revenues are the main lever, but years of austerity measures and a diversified economy have also played an important role, he said on Thursday.
“Without the flattening of this operating expense curve, we wouldn’t be presenting a balanced budget today,” he explained.
The projected surplus is another huge pendulum swing for a province that for decades has been riding the skyrocketing highs and subterranean lows of oil and gas prices.
For example, a year ago Mr. Toews projected an $18.2 billion deficit for the fiscal year ending March 31. Finally, it is now expected to be a small fraction of this amount: 3.2 billion.
The United Conservative Government expects to take 13.8 billion from non-renewable energy this year, which would make it the second highest take on record. Tar sands royalties alone would be $10 billion.
West Texas Intermediate, the benchmark price for North American oil, was trading above US$92 a barrel on Thursday. The province forecasts a more modest average of $70 per barrel over the coming year, falling into the mid-$60 range in subsequent years.
“We use, I would say, credible, but conservative, energy projections,” Toews said.
When asked if Alberta is staying on the energy price roller coaster, he said, “What I can say with confidence is that today we have a much more sustainable fiscal reality. than four years ago. »
The budget provides $62.6 billion in total government revenue offset by $59.4 billion in basic spending. That’s before additional COVID-19-related spending and canceled rail contracts to transport crude signed by the previous NDP government.
The debt borne by taxpayers should amount to 94.7 billion. Debt service charges are expected to rise slightly to $2.7 billion.
Despite the improved results, the Province expects debt to grow over the next two years to fund commitments to create jobs, grow the economy and build health care capacity.
$600 million more in health
The budget adds $600 million to the health operating budget, a commitment that will grow to $1.8 billion in 2024-25.
The money will be used to fund new intensive care beds, places in hospitals, the expansion of laboratories and hospitals and to help recruit more doctors and nurses, in particular to fill vacancies in the regions. rural and remote.
COVID-19 has strained hospitals and emergency departments and pushed the system to the brink of collapse during the fourth wave late last year.
Premier Jason Kenney said the pandemic has underscored the flaws in a system in which Alberta pays comparatively more for health care but gets less in terms of space, beds per capita and other services. . The extra money is intended to correct this disparity.
The province also plans to address labor market gaps.
Government aims to invest $72 million over next three years to expand charter schools and college programs to increase opportunities in science, high tech, engineering, math and trades craftsmanship.
There must be 171 million over three years to create 7,000 new post-secondary places in high-demand fields, including computing and data science, finance, agricultural sciences, health and aviation.
Mixed reactions
The Opposition said the budget failed to address the immediate needs of families burdened by the United Conservative Party’s long-standing policy changes that have driven up the cost of electricity, utilities, school bonuses insurance, tuition, and even camping.
“The Premier may be celebrating, but Alberta families are not,” Rachel Notley of the NDP said Thursday. There are families and small business owners who are hurting, and this budget is nowhere near enough to help them. »
The budget also promises rebates on natural gas bills to consumers. A utility discount will be triggered from 1er October if gasoline prices exceed $6.50 per gigajoule.
Mme Notley called it a phantom plan given that the government’s own forecast does not predict the price will reach that threshold and the government has not set aside any money to pay for it.
Economist Trevor Tombe said the move from a steep deficit to a surplus is the biggest in the province’s history. Tombe said he was surprised by the government’s conservative forecast for oil averaging $70 a barrel.
“That’s well below what markets really think oil prices will be,” said Tombe of the University of Calgary. So if that ends around $80, where the futures markets are right now, we could be looking at a surplus in the range of around $6 or even $6.5 billion, instead of the relatively modest $500 million. »