Alberta deficit not as bad as expected
Alberta’s finance minister released the third quarter fiscal update Wednesday morning.
The projected deficit for the 2018-2019 fiscal year is now $6.9 billion. That’s down from $8.8 billion in last spring’s budget.
“We’re prudent on our differential forecast, we’re prudent on our assumptions on full market access and we’ve been prudent on our revenue projections. We beat our deficit forecast this year while defending public services,” said Finance Minister Joe Ceci.
“It was the fact that energy prices in the first part of the year were robust but you know overall, we have come in, I think a dollar above budget on our oil projections. We’ve also been able to keep our spending down below population plus inflation so those two things have been really beneficial,” Ceci said.
Total revenue is up $1.8 billion from the budget to $49.6 billion, due to several factors, including higher resource revenue, personal income tax revenue and federal transfers.
“Although our economy is growing the recovery has not reached every kitchen table,” he said.
Ceci said pipeline bottlenecks remain one of the most serious issues for Alberta’s economy.
“That’s why we took action to curtail production and move oil by rail, short and medium term solutions to a problem that can only be solved by building pipelines,” he added.
But expenses are also up $398 million, $271 million of which is for disaster assistance for wildfires, floods and the agriculture sector.
The province is also revising its projection for economic growth in 2019 to 1.6 per cent, down from 2.5 per cent in the spring budget. A Conference Board of Canada Report, out on the same day, pegs Alberta’s growth at just 1.3 per cent. That’s the lowest projection among all provinces.
The Alberta Government is predicting a “bounce back” to 2.9 per cent growth in 2020.
This fiscal report also included the government’s path to balance which shows the province is still on track to balance the budget by 2023-24, an inclusion the finance minister said was done as an update, not because of the upcoming election.
“I’m preparing a budget, it’s the premier’s decision when the writ is dropped but there will be a budget 2019 of course,” he added.