EDMONTON – The Alberta government released its second quarter update on Tuesday, reporting an operational surplus of more than $1 billion in the first six months of the fiscal year.
“Our government has been making the right decisions to keep our finances on track,” said Finance Minister Doug Horner.
“While I am pleased with the results, I must deliver them with some caution… Fiscal responsibility and spending restraint will continue to be priorities in this budget and future budgets.”
However, the government pointed out that spending on flood recovery efforts has just started and that the disaster will impact the province’s bottom line.
By September 20, the provincial government had spent $351 million on flood assistance.
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“We are only now starting to see the costs of the flooding show up on our bottom line,” explained Horner.
“If the disasters that we have incurred this year – and that includes forest fires, that includes some of the issues around hail and also of course the largest economic disaster this country’s ever seen – if they had not happened, we’d basically be looking at balancing the budget this year.”
He added that the so-called ‘bitumen bubble’ has returned, emphasizing the need to establish new markets for Alberta oil.
The operational revenue for the first half of the fiscal year was $20.3 billion, which is $1.4 billion higher than expected. The province credits that primarily to higher energy prices and increased investment income.
The operational expense for the six month period was $19.3 billion, an increase of $247 million from the estimate, due in large part to disaster spending.
Capital spending was $2.4 billion and direct borrowing for capital purposes was $1.7 billion.
Wildrose finance critic Rob Anderson had a different take on the numbers.
“Record revenue, more debts and more deficits. Mr. Horner obviously talks about turning a corner. I hear the Edmonton Oilers have turned a corner as well. Clearly, we have serious issues as a province.”
“The forecast final deficit – operational deficit surplus of between $250 billion deficit and $250 billion surplus of course does not count the capital spending, the $4-5 billion in capital spending the government plans to do, and that’s not including the flood.”
Anderson said the consolidated cash deficit remains an estimated $3-4 billion.
More to come…
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