(WATCH: The province is starting to feel the pinch of dropping oil prices. But, as Tom Vernon reports, the government is still showing a surplus.)
EDMONTON – Alberta’s budget will stay in the black this year despite plunging oil prices, the government says.
Finance Minister Robin Campbell says in his second-quarter update that the forecast budget surplus for this fiscal year has been revised downward to $933 million.
“We still expect to be in a surplus situation at the end of the fiscal year, but because of the drop in oil prices, the surplus won’t be as large as we expected at the first quarter,” Campbell said Wednesday in his first update as finance minister
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The budget last March put the surplus at $1.1 billion — but that’s when oil prices were pegged at more than US$92 a barrel.
Oil is now below US$75 a barrel and not expected to rise any time soon due to a supply glut and instability in oil-producing regions abroad.
Campbell said the government remains committed to its goals, no matter the numbers.
“Let me be clear: whether prices go up or down, this government will remain steady on course and committed to solid fiscal principals,” he said.
“We’re going to balance this year’s operating budget and carry on the work that Albertans have told us we need to do — deliver core programs and services, and build and maintain the infrastructure that is so important to the quality of life of our growing population.”
Campbell said the province’s population is expected to grow to five million in the next decade and the government “is committed to building the schools and roads that we require to support a growing population and looking after our seniors.
As a result of an increasing population and growing economy, the update also indicates an increase in the corporate and personal income tax take this year to $17 billion.
Total spending is pegged to be just over $44 billion — which is up almost $800 million due mainly to disaster aid and infrastructure spending.
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