Last year’s Alberta deficit was less than a quarter of what was expected, due to much higher than anticipated revenues, but only modestly higher expenses, the provincial government said Thursday.

The provincial government said that its 2009-10 deficit came in at just $1 billion, well below the original estimate of $4.7 billion. It reported that revenue from oil and oil sands royalties, investment income and corporate income tax were all significantly higher than forecast in the last budget, while expenses were up only slightly. The lower deficit means less will be drawn from the Sustainability Fund, it added.

“We had a plan to manage through these difficult economic times, we stuck to that plan and it has paid off. We kept a tight rein on spending and drew on the Sustainability Fund to protect vital public programs,” said Ted Morton, minister of finance and enterprise.

Despite the much better than expected deficit performance, the province says that the revenue picture for the current fiscal year remains highly uncertain, with natural gas prices low, and oil prices, financial markets and the Canadian dollar fluctuating on a daily basis. As a result, it is maintaining the forecast deficit of $4.7 billion for 2010-2011.

IE