Alberta ends fiscal year with $4.3B surplus

Alberta Finance Minister Nate Horner speaks to reporters in Edmonton on Thursday. (Emmanuel Prince-Thauvette/Radio-Canada - image credit)
Alberta Finance Minister Nate Horner speaks to reporters in Edmonton on Thursday. (Emmanuel Prince-Thauvette/Radio-Canada - image credit)

The Alberta government ended its fiscal year on March 31 with a $4.3 billion surplus despite having to pay $3 billion in contingency costs due to the province's worst fire season on record.

The province released its final 2023-24 financial year-end report on Thursday.

Finance Minister Nate Horner defended the government's current plan to use surplus cash to pay off debt while saving some of it into the Heritage Fund, while Albertans continue to grapple with affordability issues. He noted that Albertans don't pay provincial sales tax.

"It's easy for some governments to turn to taxes and want to raise taxes to expand services and spending," Horner said. "We're committed to not doing that. So that means that we have to be prudent in how we budget and forecast."

Horner added that dealing with debt improves the cost of borrowing which he says will eventually benefit all Albertans.

"This is about sustainability and being stable going forward."

Results in the report are compared to the projections listed in the budget that was released last February.

Total revenue was $74.7 billion, $4.1 billion more than was estimated in the 2023 budget. Total expense was $70.4 billion, an increase of $2.1 billion over estimates.

On the revenue side, the treasury brought in $15.2 billion in personal income taxes, $7 billion in corporate tax and $19.3 billion in revenue from oil and gas royalties.

The price of a barrel of West Texas Intermediate oil, the province's benchmark price, was an average of $77.83 US throughout 2023-24, $1.33 less than forecast.

Last year was Alberta's worst fire season on record. The province spent $3 billion on disaster and emergency assistance, which exceeded the $1.5 billion contingency fund built into the budget. The money went to firefighting expenses and crop losses due to extreme drought.

Taxpayer-supported debt was $81.8 billion, an increase of $2.5 billion over what was forecast in the budget. Higher interest rates raised the cost of financing debt by $301 million more than estimated in the budget.

The year-end report also reflects the goals the UCP government set out in its fiscal framework.

Surplus cash is to be allocated equally to paying maturing debt and allocated to the Alberta Fund.

Funds in the Alberta Fund can be saved in the Heritage Savings Trust Fund, used for more debt repayment or spent on items that are a one-time expense that don't require additional government spending going forward.

The government said $3.7 billion was used to pay debt, with the remaining $3.7 billion moved into the Alberta Fund. The Heritage Fund is getting $2 billion of that money in this fiscal year.