Alberta expects a budget deficit of C$7.8 billion ($6.2 billion) in the 2021-22 fiscal year, the government said on Tuesday, significantly smaller than its previous estimate of a C$18.2 billion shortfall.
Strong global crude prices, increasing oil production, lower unemployment and increased exports helped Alberta revenues climb more than expected, Finance Minister Travis Toews said in a statement.
The province said it made the previous budget forecast during high uncertainty about the trajectory of the COVID-19 pandemic and pace of the vaccine rollout. Alberta’s economy was recovering faster than expected, it said, while warning there could be more volatility ahead.
“We will continue to bring spending in line with that of other provinces, attract more investment and get Albertans back to work,” Toews said.
Alberta is in the grip of a fourth wave of the COVID-19 pandemic, which could derail the economic recovery, and is leading the country in new and active cases. Even so, Toews reiterated Premier Jason Kenney’s promise that Alberta will not introduce a vaccine passport, unlike some other provinces in Canada.
Alberta’s gross domestic product (GDP) is expected to grow by 6.7% in 2021, up from the budget forecast of 4.8%.
The province is the center of Canada’s energy industry and home to the country’s vast oil sands, and its economy is closely tied to swings in global oil prices.
Growing oil sands production and higher crude prices have boosted Alberta’s estimated non-renewable resource revenues to C$9.8 billion in the 2021-22 fiscal year, up from a previous forecast of C$2.9 billion.