What to expect in Alberta Budget 2022

Alberta finance minister Travis Toews and Alberta Premier Jason Kenney chat during the speech from the throne in Edmonton Alta, on Tuesday February 22, 2022. THE CANADIAN PRESS/Jason Franson

The government of Alberta appears poised to balance its books for the first time in years when it releases its 2022-23 budget on Thursday afternoon.

Finance Minister Travis Toews’ fiscal blueprint for the province has been made rosier as royalty revenues grow along with the price of oil, resulting in “a dramatic improvement in Alberta’s finances,“ according to Tuesday’s throne speech.

"We have an improving fiscal situation here in the province, certainly this year, but we have an improving fiscal trajectory as well," Toews said last week.

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As of last Friday, the price of West Texas Intermediate was up 73 per cent over the last year, and the price of Western Canadian Select boomed to more than 105 per cent over last year.

WTI was priced at US$96 at the end of last week, more than double the government’s estimate of US$46 outlined in Budget 2021.

The revenue generated by those oil prices is expected to dramatically cut into, if not eliminate, what was to be a $5.8-billion deficit as recently as November.

MacEwan University political scientist Chaldeans Mensah says while the surging royalty revenues will fill provincial coffers, they also prompt the government to make some potentially tough political and policy choices.

“People are going to be watching for how the government manages a windfall,” he said. “Will it be put to pay down the debt? Will it be put into the heritage savings fund?”

Toews has hinted both of those are in the budget plan, along with new investments in capital projects.

The province’s debt was projected to exceed $100 billion as of the latest fiscal update, published in late November.

Alberta’s government has balanced its books only once since 2008:, a $1.1-billion surplus in 2015-16.

Funding to expand health-care capacity is another potential big-ticket item hinted at in the throne speech, with Premier Jason Kenney telling reporters the rate of surgeries performed in charter facilities will rise from 15 per cent to 30 per cent in the coming years.

“This is one way of getting more surgeries done more efficiently and more quickly to reduce surgical wait times,” Kenney said Tuesday.

“One hundred per cent of the surgeries that will be funded through this initiative are publicly insured. No one has to get out their credit card.”

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While oil prices bolster the province’s bottom line, high energy costs are showing up on Albertans’ utility bills, adding to a growing cost-of-living crunch already exacerbated by inflation.

Oil prices also aren’t everything when it comes to the province’s finances, the government claims, with Premier Kenney pointing to spending cuts in prior budgets as contributing to a reduced deficit.

“You'll see in tomorrow's budget Alberta is getting finances under control, thanks in part to some admittedly unpopular decisions we made,” Kenney said Wednesday.

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Mensah says politics also play a role in this budget, with the premier up for an internal leadership review in April and provincial election to be held before May of 2023.

He says that means both the cuts that were seen in prior budgets and introducing a new government revenue source through taxes or fees are likely both off the table for tomorrow.

“People would see that as bad news,” he said. “The political dial will be moved only when people feel that this budget is going to address some of their concerns.”

Along those lines, the government hinted at the creation of a consumer protection rebate-style program to address soaring energy bills, as well as refreshing its familiar theme of reducing red tape.

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The government’s challenge will be turning some of that big-picture fiscal good news into actual benefits for Albertans weary after nearly two years of the ongoing COVID-19 pandemic, Mensay says.

“The numbers are going to be very good,” he said of the debt and deficit.

“But [Kenney] has to deliver to meet the concerns of ordinary Albertans [who are] facing increasing costs and dealing with questions of affordability.”