Finance Minister Robin Campbell delivered Alberta’s fiscal update Wednesday – and said Alberta’s provincial surplus was shrinking, as the price of oil falls – but the province says the books are still in the black.
Campbell said, in his second-quarter fiscal update, that the forecast budget surplus for this fiscal year has been revised, and now sits at $933 million – down from the surplus of $1.1 billion set in March.
The original surplus was determined when oil prices were set at more than US$92 per barrel.
Now, oil is below US $75 a barrel, and it’s not expected to rise anytime soon due to a supply glut and instability in oil producing regions overseas.
“Sustained low prices will have an impact on our revenue, so we have to move cautiously and it will not be business as usual,” Campbell said. “We remain financially on track for this year, but we need to be fiscally prudent in our planning and projections as we go forward.”
As for spending, more than anticipated is being spent on infrastructure, with the budget for capital projects at $7.2 billion, an increase of $670 million from what was budgeted in the spring.
The province said the increase is mainly to cover costs associated with new schools recently announced.
However, the province now plans to borrow $2.2 billion, nearly half of the $5 billion it expected to borrow.
Total spending is pegged at $44 billion, up nearly $800 million due to disaster aid and infrastructure spending.
With files from Laura Tupper and The Canadian Press
