Alberta’s strong finances and large energy reserves point to a bright future for the province, according to a report released by the Investment Dealers Association of Canada.

Alberta has become the country’s only debt-free province, and its vast energy reserves bode well for stronger growth and prosperity in the province.

“Windfall revenues have opened up fiscal options to sustain growth,” noted Joe Oliver, president and CEO of the IDA. “There has been increased spending on social services, infrastructure and transportation. Taxes have been reduced and a fiscal cushion built up. These are initiatives that attract businesses to the province and contribute to Alberta’s promising outlook,” said Oliver.

The oil and gas sector has been a key driver of economic activity but there has been important diversification, partly based on downstream energy activities such as pipelines and petrochemicals. Manufacturing, reflecting a major food processing industry, and service industries such as finance, real estate and information and culture have received steady annual capital infusions.

The province’s capital market has been boosted by vigorous energy income trust financings. These financings reflect a change in the profile of the province’s oil and gas sector, whereby trusts often adopt an acquisition strategy to gain new producing assets as existing reserves become depleted.

Spurred in part by high oil and gas prices, mergers and acquisitions activity has also picked up this year. The oil and gas sector was involved in most of Alberta’s cross border activity, highlighted by Encana’s $3.6 billion purchase of Colorado-based Tom Brown Inc., and a significant part of Canadian-based transactions.