Alberta’s government says that strong fiscal results will allow it to increase provincial capital investment and savings.

The province said that higher-than-projected revenue in the current fiscal year and better-than-forecast year-end results from 2005-2006 will allow the government to strengthen funding for infrastructure, health, education, and additional savings.

“Alberta’s economy is strong and vibrant, with the population growing by an estimated 90,000 people last year, the equivalent of the City of Red Deer,” said Finance Minister Shirley McClellan. “That kind of growth brings added pressure on our provincial infrastructure and services. We are addressing these priorities, while making investments that will benefit future generations.”

The provincial government announced a $1.8 billion increase in capital funding, including $711 million for 2006-07 projects and $1.1 billion for future years. The increase will provide funding for cost escalation of approved projects, additional school projects, health equipment, a new Edmonton Remand Centre, a province-wide policing information technology system, petroleum tank site remediation, regional water systems, and other infrastructure support.

Education funding has been increased by $293 million. Health funding will rise by $262 million, including $150 million for medical equipment, $81 million for health authority operations, and $31 million for auxiliary nursing salary adjustments.

A new $200 million Energy Innovation Fund has been established to support energy development and efficiency as well as environmental protection and sustainability.

Also, savings will be increased by allocating an additional $250 million to the advanced education endowment, $100 million to the Science and Engineering Fund, and $41 million to the Heritage Fund for inflation proofing. This brings the total 2006-07 allocations for the Heritage Fund, other endowments and funds to $2.5 billion, an increase of $591 million.

Total revenue is forecast to be $1.5 billion more than budget, primarily due to higher income tax and energy revenue. While oil prices have reached record highs, natural gas prices have been weaker than expected, it noted. Overall, resource revenue is now projected to increase by $531 million from the budget estimate.

Expense is expected to be $1.3 billion higher than budget, primarily due to funding increases for capital projects, disaster relief, and natural gas rebates.

The provincial surplus is forecast at $4.3 billion, up $193 million from the budget estimate.

The Heritage Fund report notes investment income is expected to be $784 million, about $90 million lower than budgeted because of a decline in markets. After additional allocations from the Sustainability Fund, the book value of the Heritage Fund on a consolidated basis is forecast to be $15 billion on March 31, 2007, up from $13.4 billion at the end of last fiscal year.