Alberta Finance Minister Joe Ceci says the province’s economic picture is brightening with a lower-than-expected deficit last year thanks in part to higher resource revenue.
The government’s 2017-18 annual report shows Alberta ended the fiscal year with an $8-billion deficit. That’s $2.5 billion lower than what was expected in last year’s budget.
The New Democratic Party (NDP) government says it’s on track to return to balanced books by 2023-24.
“While we’re happy to see our economy on the right track forward, we know the economic recovery has yet to reach every kitchen table in this province. And for us, an economic recovery that doesn’t reach every kitchen table is no recovery at all,” Ceci said Thursday.
“That’s why we’re going to continue to make sure the Trans Mountain pipeline gets built,” he added. “It’s why we’re going to keep working to create jobs and diversify our economy. It’s why we’re going to keep defending funding for our classrooms and hospitals. And it’s why we’re going to continue to make life more affordable for Alberta families.”
The report indicates the provincial economy has recovered about two-thirds of what was lost in a recession that began in 2014. It grew by 4.9% last year and is expected to add 2.7% this year.
There was $43.4 billion in borrowing for government capital and operational spending at year end and net debt stood at $19.3 billion as of March 31 — about $1 billion lower than forecasted.
A rebound in the energy sector, driven by improved oil prices, spearheaded the recovery.
Non-renewable resource revenue was $5 billion — up by $1.9 billion from the previous year and $1.2 billion higher than the budget estimate.
Conventional oil and gas drilling was up by 65%. The manufacturing and forestry sectors also saw stronger performance.
Despite the welcome boost, the province is trying to be less reliant on the energy sector, Ceci said: “Diversification is critical so that we don’t continue to ride the oil and gas energy roller-coaster, (so) that we see a more flat, predictable revenue source.”
Personal and corporate income taxes came in lower than anticipated, by $402 million and $470 million, respectively.
United Conservative Party finance critic Drew Barnes said the discrepancy shows NDP tax increases are driving away jobs and investment.
“If the NDP had focused on removing barriers to free-enterprise and the creation of mortgage-paying jobs instead of tax hikes to cover their rampant spending increases, they could have had higher tax revenue from a stronger economy,” he said.
Even though the deficit is expected to be lower than budget predictions, it far exceeds what the NDP was projecting for last year in 2015, when it took office, Barnes added.
“It’s not good enough to tell Albertans that the NDP deficit was only eight times what the NDP promised, not 10, just because the government happened to get lucky with resource and investment revenue last year.”