EDMONTON—Let the good times roll in Alberta.
That is, at least, the message emerging from a snapshot of the provincial economy offered Thursday in Alberta’s second quarterly report of the fiscal year.
The province is looking at a $12.3-billion surplus for the current fiscal year, according to its financial statement. While down slightly from the first-quarter projection of a $13.2-billion surplus, this includes a slew of new spending initiatives announced this week by Premier Danielle Smith.
Those initiatives in the name of inflation relief — including sending $600 over six months to eligible Albertans; tax relief; and utility rebates — are expected to cost $2.8 billion over three years.
Meanwhile, Alberta is looking recession-proof, according to the provincial government’s financial stewards. Add to that, its housing market is not expected to see a major correction like that anticipated in places such as Toronto or Vancouver, as the province is expecting good migration and low inventory. Houses are more affordable in Alberta and it generally has a lower cost of living.
Total revenue for Alberta is expected to be $76.9 billion for this fiscal year, up $14.3 billion from where last year’s budget had it pegged. The province is expecting to dish out a total of $64.6 billion in expenses.
Total revenue will likely drop by $7.3 billion next year as energy prices go down, according to the province.
West Texas Intermediate oil — its benchmark price is used by Alberta to estimate finances — is expected to be US91.50 per barrel this fiscal year, although the pricing of oil is volatile due to things such as geopolitics and war. For the next two years, it is expected to drop to $78.50 and $73.50 per barrel, respectively.
Also in the next two fiscal years, Alberta’s surplus is expected to drop to $5.6 billion in 2023-24 and $5.3 billion in 2024-25.
Still, the province is expected to withstand any global recession that may be on the horizon, according to treasury board and finance officials.
Employment has been picking up and the province’s population is growing. Alberta is expected to see a 2.2 per cent increase in its population next year. Meanwhile, its GDP is increasing 4.8 per cent in 2022, with an average growth of 2.8 per cent in the following years, up to 2025.
Alberta is expecting lots of new investment as well, especially when it comes to industries outside the energy sector, such as construction and renewables. Investment in non-energy industries is expected to grow by nine per cent in 2023.
Non-renewable investment, meanwhile, is expected to grow by $2.9 billion in 2022.
Alberta is expecting to see high corporate profits and large household income growth making the province’s nominal GDP (a high level measure of income) grow 24 per cent.
The price differential between Western Canadian Select and WTI is expected to narrow to US16.10 per barrel as the Trans Mountain pipeline expansion comes online in late 2023. It currently is projected to be at about US$19.80 per barrel for the fiscal year.
Alberta is expecting to make a large debt payment this year to the tune of $13.4 billion. The government wants to put another $10.8 billion over the next three years toward “savings, debt reduction and other priorities to further secure Alberta’s future economic prosperity,” according to a news release.
Earlier this week, the province rolled out an affordability package with plans to reindex support programs and send direct payments of $600 over the next six months per child in families with a household income of less than $180,000. Seniors would also qualify for that payment along with people on the province’s AISH and PDD programs.
Smith has indicated that more initiatives will likely be rolled out as well.
Kieran Leavitt is an Edmonton-based political reporter for the Toronto Star. Follow him on Twitter: @kieranleavitt
This content was originally published here.
