Alberta Premier Jason Kenney makes his way to the chamber in Edmonton on Friday, March 20, 2020. Kenney says a recent bump in energy prices in the third quarter of the budget is helping the bottom line as his government prepares to introduce its 2021-22 budget. THE CANADIAN PRESS/Jason Franson

Higher oil prices boosting Alberta’s bottom line as budget looms Thursday: Kenney

EDMONTON — Premier Jason Kenney says a recent bump in energy prices in the third quarter of the current budget is helping the bottom line as his government prepares to introduce its 2021-22 budget.

The budget deficit was on track to exceed $21 billion this fiscal year, but Kenney said it will now be about $14 billion.

Alberta Finance Department officials declined to confirm Kenney’s estimate.

It’s been a roller-coaster ride for Alberta’s deficit this fiscal year, which ends March 31.

The deficit was predicted to be $6.8 billion when Finance Minister Travis Toews introduced the budget last February. But a global recession, the COVID-19 pandemic and an energy price war sent that forecast soaring to $21 billion in November.

“Thankfully with significant recovery in energy prices, our revised projection has come down in our last quarterly report to about $14 billion,” Kenney said Tuesday.

“You’ll have to wait and see on Thursday for our final projection for the fiscal year that is about to end, but it will be in that range.”

Kenney said Thursday’s budget will focus on getting Alberta through the pandemic and getting the economy back on its feet. There will be no new tax hikes or drastic spending reductions.

“As much as I hate deficits, now would be the worst time to cut billions of additional dollars in spending where we need it — in health care — and we need it to help stimulate economic growth.”

Kenney has said the long-term plan to get Alberta back to budget balance, and build confidence with investors and bond rating agencies, will be guided by keeping the net debt to GDP ratio below 30 per cent.

He said the government will also continue to reduce per capita public sector spending to put it in line with provinces such as British Columbia, Ontario and Quebec.

The most recent budget update estimates taxpayer-supported debt this year will exceed $97 billion.

Kenney said he is buoyed by the benchmark West Texas Intermediate price for oil hovering above US$60 a barrel, but said his United Conservative government won’t budget for boom times.

“We have seen some projections of strong energy prices in the latter half of this year … but it would be irresponsible to plan for that,” he said.

“So you will see quite conservative projections for commodity prices in Thursday’s budget, in fact slightly below the private sector forecasting average, because we think that’s the prudent thing to do.”

Alberta’s economy has for decades been soaring and plunging, often within a fiscal year, as successive governments kept taxes the lowest in Canada while counting on oil and gas royalties to fill in deficit gaps.

Alberta has not had a sales tax since 1937 but Kenney has been hearing of late from economists, and last week the Business Council of Alberta, urging the province to look at a retail sales tax as a way to bring stability to budgets.

Kenney and the Opposition NDP have both said now is not the time for a sales tax.

Earlier Tuesday, NDP Leader Rachel Notley called on the government to increase support for health care in the upcoming budget.

Notley called for a repeat of the $1 billion in aid authorized last year, with another billion this year and again in 2022, to address the pandemic and reduce the backlog of surgeries delayed due to the crisis.

“Alberta’s health-care heroes have been working flat out to keep us all safe over the past year,” said Notley.

“Premier Jason Kenney and the UCP must provide them with the resources they need to keep up the fight, and to start helping the Albertans who were forced to wait for their care while our hospitals filled up with hundreds of COVID patients.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

House prices in Alberta are going up in many communities, reports the ATB. (THE CANADIAN PRESS/Graeme Roy)
Alberta’s house prices are on the rise: ATB

Supply has been low, relative to demand

The interchange at Highway 2 and McKenzie Road at the south end of Gasoline Alley is being redesigned with two roundabouts. Construction is expected to begin this month and finish in October. (Graphic from Red Deer County)
Roudabouts coming to McKenzie Road overpass at Gasoline Alley

Project expected to improve traffic flow at busy intersections

A federal strategy to preserve threatened trout could conflict with provincial coal leases in the Eastern Slopes of the Rockies. (Contributed photo by Jeff Lund).
Federal regulations could save Alberta’s bull trout by shutting down mining plans, says biologist

Ottawa’s new strategy identifies a 30-metre protected area along rivers and streams

A prairie fire in the Burnt Lake district. (Photo by Bert Fors via Red Deer Archives)
Michael Dawe: Fires of spring 1931 in central Alberta

Central Alberta has just come through a relatively warm and dry winter… Continue reading

Gwynne Dyer
Opinion: Boris Johnson is to blame for what’s happening in Ireland

Twenty-three years of peace in Northern Ireland, after a sectarian war that… Continue reading

Canada's Sarah Pavan and Melissa Humana-Paredes, fom left, celebrate after winning women's gold medal match against Brazil's team at the Beach Volley Worldtour Major Series, in Vienna, Austria on August 4, 2019. THE CANADIAN PRESS/AP, Ronald Zak
Canada’s world champion beach volleyball duo finally getting games before Tokyo

Canada’s world champion beach volleyball duo finally getting games before Tokyo

Toronto Raptors center Khem Birch (24) gets fouled by Atlanta Hawks guard Bogdan Bogdanovic (13) during the first half of an NBA basketball game Tuesday, April 13, 2021, in Tampa, Fla. (AP Photo/Chris O'Meara)
Bogdanovic, Capela lead Hawks past Raptors 107-103

Bogdanovic, Capela lead Hawks past Raptors 107-103

Toronto Blue Jays starting pitcher Hyun Jin Ryu throws to a New York Yankees batter during the first inning of a baseball game Tuesday, April 13, 2021, in Dunedin, Fla. (AP Photo/Mike Carlson)
Ryu sharp into 7th, Semien homers as Blue Jays top Yanks 7-3

Ryu sharp into 7th, Semien homers as Blue Jays top Yanks 7-3

Calgary Flames' Johnny Gaudreau (13) scores the game winning goal on Toronto Maple Leafs goaltender David Rittich (33) in overtime NHL action in Toronto on Tuesday, April 13, 2021.THE CANADIAN PRESS/Frank Gunn
Gaudreau scores in overtime, Flames beat Maple Leafs 3-2

Gaudreau scores in overtime, Flames beat Maple Leafs 3-2

Jim Bullock, Vicki Pappas and Randy Waples off to Canadian Horse Racing Hall of Fame

Jim Bullock, Vicki Pappas and Randy Waples off to Canadian Horse Racing Hall of Fame

Canada's Evelyne Viens celebrates scoring against Wales during the women's international friendly soccer match at Leckwith Stadium, Wales, Friday April 9, 2021. THE CANADIAN PRESS/Nick Potts/PA via AP
Canada capitalizes on England mistakes to win women’s soccer friendly 2-0

Canada capitalizes on England mistakes to win women’s soccer friendly 2-0

Most Read