Alberta’s 2020/21 deficit stood at C$20.2 billion, compared with a C$24.2 billion deficit projected in August, as recovering crude oil prices help the province narrow its deficit.
Still, the deficit is larger than the historical trend, reflecting the impact of pandemic spending.
Finance minister Travis Toews said Alberta will set aside C$1.25 billion in contingency funding to fight COVID-19. The province also plans to invest nearly C$21 billion over three years in construction projects to create new jobs and support economic recovery.
“It’s become clear that even after we beat the pandemic there will be a residual need for extra resources in healthcare,” Toews said in his budget address.
“Budget 2021 will provide funding…to ensure Albertans have a competitive edge, as economies reopen, growth restarts and opportunities reappear.”
Alberta is the centre of Canada’s fossil fuel industry, and oil and gas revenues generate much of the province’s economic activity and government revenues. The energy industry was battered last year by a collapse in global fuel demand due to COVID-19, although commodity prices are picking up as vaccines are rolled out globally.
Toews said Alberta’s real gross domestic product would grow 4.8% in 2020, having contracted 7.8% last year.
The United Conservative Party government expects the provincial economy to reach pre-COVID levels by 2022 and said the deficit will shrink to C$11 billion in 2022/23 and C$8 billion in 2023/24.
Revenue for the 2021/22 fiscal year is estimated at C$43.7 billion, up from $42.3 billion in 2020/21. Total spending is expected to be down slightly at C$61.9 billion, from C$62.5 billion in the previous fiscal year.
Alberta forecast U.S. crude prices to average $46 per barrel in 2021/22. 29dk2902l