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By Canadian Press/Connor Gunn

Alberta halves projected budget deficit to $7.8B; credits global boost in oil demand

Aug 31, 2021 | 11:00 AM

EDMONTON, AB – New numbers show Alberta’s bottom line is on track to look better this fiscal year, but the province remains mired in a deep ditch of red ink.

Finance Minister Travis Toews says this year’s deficit is projected to be $7.8 billion, less than half of the $18.2 billion projected in the 2021-22 budget in February.

“Alberta added 73,000 jobs since the beginning of the year and has now recovered nearly 90 per cent of the jobs lost when the pandemic first took hold in the province,” the release states.

Taxpayer-supported debt is projected to reach nearly $106 billion by next March, with debt interest payments pegged at $2.6 billion.

The government credits the turnaround to an ongoing economic recovery from COVID-19 and to a rebound in the energy sector.

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Travis Toews, President of Treasury Board and Minister of Finance, says after a challenging year, the province is seeing signs of economic rebounding through parts of 2021.

“After a historically challenging year, Alberta’s economy is already witnessing signs of recovery and growth. While this indicates Alberta’s Recovery Plan is working, we know there is still more to do to create jobs and restore Alberta’s place as the economic driver of the nation. We will continue to bring spending in line with that of other provinces, attract more investment and get Albertans back to work.”

West Texas Intermediate, the benchmark price for oil, was expected to fetch US$46 a barrel in the budget, but has been rising sharply and is expected to average more than US$65 a barrel this year.

The province says “Alberta’s government continues to hold three fiscal anchors to guide decision-making” by:

1. Keeping net debt below 30 per cent of GDP.
2. Aligning per capita spending with comparator provinces.
3. Setting a time frame for balancing the budget once the government has a clear picture of the long-term global impacts of the pandemic.

The government says there has been a worldwide resurgence in oil demand along with price restraint by the oil cartel OPEC.