Alberta’s good first-quarter financial news hopefully will give the business community a healthy dose of optimism, says Red Deer and District Chamber CEO Rick More.
Finance Minister Travis Toews says this year’s deficit is projected to be $7.8 billion, less than half of the $18.2 billion projected in the 2021-22 budget in February.
More said that is welcome news.
“To be $10.5 billion less in the forecast deficit has got to be something that says there might be hope,” especially when combined with revenues that are expected to come in more than $11 billion higher than projected in the budget.
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Another important positive sign is that unemployment is forecast to one per cent lower than originally projected, More said.
The government says 73,000 jobs have been created since the beginning of the year and that 90 per cent of the jobs lost during the pandemic have been recovered.
Not all the financial news is good, however.
Toews said taxpayer-supported debt is projected to reach nearly $106 billion by next March, with debt interest payments pegged at $2.6 billion.
The government credits the turnaround to an ongoing economic recovery from COVID-19 and to a rebound in the energy sector.
According to the Alberta government, there has been a worldwide resurgence in oil demand along with price restraint by the oil cartel OPEC.
Among the positive signs is more people are willing to start spending in stores again.
“Another thing we look at is the percentage rise in consumer spending,” said More. “That does show that we’re slowly getting some consumer confidence happening and getting that dollar moving.”
Alberta is projecting its gross domestic product will grow by 6.7 per cent this year, which many economic analysts predict will lead the nation.
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There have been signs that area businesses — including those in the hardest hit sectors — hospitality and restaurants — are beginning to make up lost ground.
“The restaurant industry has done fairly well as of late and through the summer.”
For many restaurants, pandemic-related health restrictions on indoor dining meant they had to expand and streamline their takeout and pick-up options. As diners return, they are still benefiting from that additional revenue stream.
“They’re feeling a little better that they can pay some bills right now.”
More said it will be interesting to see how the other provinces’ financial situations are stacking up.
“That could be a real comparative thing because we’re all handling (the pandemic) differently.”
– With files from The Canadian Press