Alberta on Tuesday forecast a C$2.4 billion ($1.8 billion) budget surplus in the 2023/24 fiscal year as resource revenues remained strong but shrank from the record levels hit this year.
Alberta’s surplus in the 2022/23 fiscal year is expected to reach C$10.4 billion after soaring global energy prices and increased oil output swelled provincial coffers.
The province is also forecasting surpluses of C$2 billion and C$1.4 billion over 2024/25 and 2025/26, respectively.
The rosy financial outlook is likely to provide a boost to Premier Danielle Smith, who faces a provincial election later this year and needs to broaden her appeal beyond her right-wing support base.
Alberta will use some of its surplus to boost investment in healthcare, policing, skills training and education. The province also announced a new fiscal framework that would require all future Alberta governments to use any surpluses to pay down debt before investing in one-time initiatives.
“In Budget 2023, we continue our commitment to paying down debt all while continuing to position our economy for growth and invest in the top priorities of Albertans,” Finance Minister Travis Toews said in a statement.
Total expenditure in 2023/24 were forecast to hit C$68.3 billion, which is C$2.6 billion more than forecast for 2022/23.
Alberta’s revenue is set to hit a record C$76 billion this fiscal year ending March 31 and expected to fall to C$71 billion in 2023/24, as energy prices ease from the 14-year highs they hit last year.
Resources revenues, which mainly comprise money from oil production, are forecast to fall to C$18.4 billion in 2023/24 from C$27.5 billion in the current fiscal year.
Real GDP growth is also expected to slow to 2.8% in 2023 from 4.8% in 2022 as higher interest rates and prices weigh on consumer spending and residential investment.
The Alberta government based its 2023/24 budget assumptions on an average U.S. crude oil price of $79 a barrel. U.S. oil futures are currently trading around $77 a barrel.
Neighboring British Columbia also released its 2023/24 budget on Tuesday, forecasting a C$4.2 billion deficit for the coming fiscal years as revenues decline and the Pacific province’s government raises spending on healthcare and housing.