“Anything that goes up will fall,” Jason Nixon said Tuesday in his first fiscal briefing as finance minister. Debt repayment, savings for the future and keeping the price of public services manageable for Alberts are the government’s priorities, he said. “I think it’s our job right now to make sure we use these resources strategically to help Alberts deal with these issues right now, especially inflation and affordability,” he said. “But do it in such a way that we do not create problems for future governments when these oil and gas prices fall again,” Nixon said. Nixon said he plans to introduce legislation in the fall that will allow governments to reinvest more interest generated by the Heritage Savings Fund. At the moment, the law requires the government to leave enough money in the fund to take inflation into account and transfer the rest to general revenue. The fund is now valued at $ 20 billion after a successful year with returns of almost 12%. Nixon said he would reveal more details later about how the United Conservative government intends to use its unplanned surplus. Alberta earned 56 percent more revenue during the year 2021-22 than originally projected, according to the government’s latest fiscal briefing released on Tuesday. Rising oil and gas prices sent a record $ 16.2 billion in revenue from non-renewable sources to provincial coffers, overshadowing the previous record of $ 14.3 billion in 2005-06. In the spring of 2021, the province saw an expected deficit of $ 18.2 billion for next year. Economists forecast that the average reference price for West Texas Intermediate oil would be $ 46 per barrel. However, oil prices exceeded expectations and then skyrocketed in the last two months of the financial year as Russia began its invasion of Ukraine. The average price of oil last year was US $ 77 per barrel. It is currently at $ 111. Trevor Tomb, an economist at the University of Calgary, said the dramatic economic situation could be the biggest in Canadian political history. “Hopefully, saving those dollars is at the top of the agenda,” he said Tuesday. Investing large surpluses will now translate into years of higher investment income that could be used to repay debt or finance public services, he said. Tomb said low-income Alberts are more affected by rising prices and that the provincial government could easily afford to send $ 125 discounts to all households to help consumers offset the punitive cost of living. As people struggled to move beyond the COVID-19 pandemic, economic activity increased and the provincial government collected more corporate and personal income taxes than expected. Both rising oil prices and most of the profitable oil and gas production facilities – allowing the government to charge higher royalties – have helped boost record-breaking revenue. About half of the province’s revenue came from non-renewable sources. The government also said that its partial purchase and renegotiation of the Sturgeon refinery deal has saved money.
The opposition wants the Alberts to reap the benefits
NDP leader Rachel Notley said on Tuesday that the county’s unexpected profits had nothing to do with the government’s efforts to cut spending. He also noted that school boards did not spend on education funding and said more money could have been invested in the besieged EMS system. Notley said the government can afford to adjust income taxes and social assistance programs to increase inflation. “It is not enough for this government to pat itself on the back and party while we see families fighting in a way they have not fought for 40 years,” he said, pointing to rising household spending and health care taxation and educational systems. The opposition is working with experts to draft a proposal on how they would use the province’s surplus, he said. Also in the fourth quarter update on Tuesday, the provincial debt reached $ 93 billion on March 31, after the government repaid $ 1.5 billion owed. The government also spent $ 2.5 billion more than planned. Total spending was $ 64.4 billion last year. The government’s response to COVID-19 was more expensive than expected, with health care costs $ 1.7 billion more than expected. Providing $ 2.9 billion in aid to farmers affected by the drought in the summer of 2021 also increased costs.
