Alberta Budget 2022: 5 charts to see before budget day

The Alberta Legislature. (Sean Amato/CTV News Edmonton)

Finance Minister Travis Toews is set to deliver his fourth provincial budget, and second of the pandemic, on Thursday afternoon with rising oil prices set to be a central theme of budget 2022.

In a shift from the prior dour balance sheets, this year’s budget appears poised to be close to balanced, as rising oil prices coupled with reduced costs could produce a budgetary surplus.

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“We have significantly restrained spending. Alberta was spending too much,” Premier Jason Kenney told reporters.

Budget 2022 will be unveiled on Feb. 24 at 3:15 p.m.

Ahead of that, here's some background on key indicators to monitor as the province enters a new fiscal year.

OIL PRICES

Oil prices will be among the defining elements of this year’s budget.

The United Conservative government began its mandate amid low oil prices that collapsed near the start of the pandemic.

But since then, prices have steadily rebounded.

The price of West Texas Intermediate is up 73 per cent over the last year with the price of Western Canadian Select booming by nearly 105 per cent.

Budget 2021 was based on a conservative estimate of WTI prices at just US$46. That projection rose to above US$70 a barrel in November’s fiscal update.

Both of those figures greatly underestimated the market, as the actual price at the end of last week was closer to US$96.

That difference leads to a better-than-expected bottom line, even as prices remain volatile, as seen by a sharp fall in prices in late 2021 as the Omicron variant surged across the globe.

RESOURCE REVENUE

The above graph measures how much revenue the province gained from non-renewable resource revenues each fiscal year.

High oil prices are expected to lead to annual increases in both per cent and dollar terms of resource revenues after both measures fell last year. 

DEBT AND DEFICIT

Once again, oil prices will help reverse what appeared to be a bleak picture for the province’s debt and deficit. 

The latter reached almost $17 billion last year. But, at the most recent fiscal update in November, the deficit was projected to fall to $5.8 billion. 

Toews will also be able to cut into what he termed three years ago “the fastest growing debt of any province or state in North America” that the government also projected would surpass $101 billion by the end of next month.

DEBT TO GDP RATIO

While Alberta’s deficit and debt numbers have been ugly in recent budgets, it’s also one side of the fiscal coin.

The ratio of debt to Gross Domestic Product is considered an indicator of financial health and compares what a government owes with what it produces.

A low ratio is considered a positive, and highlights a government’s ability to pay off debt.

In this metric, Alberta has remained strong compared to other provinces, and is tied for the lowest ratio in Canada with B.C., according to RBC Economics figures. 

UNEMPLOYMENT

Alberta has had among the highest unemployment rates in Canada throughout the pandemic, though rates have steadily fallen since peaking at 15.3 per cent in May 2020.

Unemployment in Alberta sits at 7.2 per cent as of January, still among the highest in the country, but also below four other provinces, including Ontario (7.3 per cent).

Job creation has been a frequent theme for the UCP government in past budgets and will be again on Thursday.