Province extends affordability measures amid fiscal year end $3.9B surplus

Alberta fiscal picture looks rosy Alberta’s back in the black as its financial situation turns around. Stephanie Thomas reports

CALGARY — As Alberta posts a $3.9-billion surplus for the latest fiscal reports, Finance Minister Jason Nixon says Albertans can expect to see "affordability measures" as an extension of the province's flush financial statements.

The surplus amount is the final number based on revenues minus expenses for the 2021-22 fiscal year, which ended on March 31.

During a news conference at the McDougall Centre in Calgary on Tuesday, Nixon said the province has already committed $2 billion targeted to alleviate economic challenges, including the price at the pumps and utility costs.

"We see that as an important part of how we would invest some of the resources that were gaining through the windfall in oil and gas revenues," said Nixon.

He added the provincial gas tax holiday, which has been extended to September, could be extended through the rest of the year if revenues from non-renewable resources continue to be higher than $90 oil.

However, there is no firm timeline and Nixon said the province will watch economic factors heading into the first quarter before deciding a further extension.

Starting in July, Alberta households and small business will see a $50 rebate on utility bills for three consecutive months for a total of $150, as part of an affordability measure for Albertans.

Nixon also said there are not current plans to cut prosperity checks for Albertans – as previous provincial governments have done – to help with ongoing inflation, gas prices or goods increases.

"I think it's incumbent upon us at the moment to make sure that we strategically use these resources to help Albertans through those issues right now, particularly around inflation and affordability. But do it in such a way that we don't create problems for future governments when those oil and gas prices come back down," said Nixon.

He added excessive government money inside the system has partly caused the record inflation, and said his office is wary of further contributing to inflation.

OPPOSITION DEMANDS ACTION

NDP Opposition Leader Rachel Notley said that the measures that have already been announced fall short of providing assistance to Albertans.

She commended the UCP for implementing the gas tax holiday and extending it for an additional three months, but she said it's not enough.

"There's a range of things they can do, specifically focused on low and middle-income families that are bearing the greatest burden of this inflationary crisis," said Notley to reporters on Tuesday afternoon.

"Meanwhile they've jacked up insurance, tuition, utilities. There used to be a cap on utilities. People wouldn't need these rebates if the cap was still there," she said."

RECORD HIGH OIL PRICES

Surging oil prices from earlier in 2022 into present day have contributed greatly to the province's current financial position.

The latest fiscal report shows the highest turnaround in Alberta history – with $16.17-billion in revenues from non-renewable energy resources, smashing the previous record set in 2005-06 with $14.34-billion.

"(Alberta is) as firmly on the resource revenue roller coaster as we have ever been. We need nearly one quarter of our entire government budget to come from resource revenues," said University of Calgary economics professor Trevor Tombe

Total revenue was $68.3-billion an increase of $24.6-billion from the forecast in Budget 2021.

West Texas Intermediate, the benchmark price for North American oil, has softened of late, but sits above US$100 a barrel.

Tombe said the province is in a strong financial position to consider long-term investment strategies to make the budget more resilient.

"I think the more important question for Albertans is, what does this year have in store and it does look like we are on track for a surplus well in excess of $10 billion for the coming year," he said.

THE PROVINCE'S PLANS

While the province is expected to take a reserved approach in the near-term, Nixon says work is underway to focus on two priorities: saving and debt repayment.

The province has contributed $1.5-billion on the total debt-load estimated at upward of $93 billion.

Nixon also said the province plans to introduce legislation in the fall that would increase the contribution limit set for the Alberta Heritage Fund.

Currently, the Heritage Fund is worth $20-billion, the highest it's ever been.

Total revenue was $68.3-billion, an increase of $24.6-billion from the forecast in Budget 2021.

Higher energy prices saw increases of $13.3 billion in resource revenue and $4.4 billion in income taxes.

West Texas Intermediate, the benchmark price for North American oil, has softened of late, but sits above US$100 a barrel.

The budget, which ended on March 31, was last forecast to come in at a $3.2 billion deficit.

It's the first time in seven years the provincial budget will not sport red ink on the bottom line.

The province will release its next quarterly update in late August which will include financial forecasting. Tombe said this is going to be the most significant fiscal report of Alberta's recent history.

- With files from CTV News' Tyson Fedor and The Canadian Press