Alberta
Finance Minister Nate Horner says Alberta on track to $2.4 billion surplus
Q1 update: Continued fiscal growth
Alberta’s strong fiscal management continues to secure Alberta’s future.
Alberta is on course to record a $2.4-billion surplus at the end of 2023-24, despite an unprecedented wildfire season and ongoing economic volatility. This is $94 million higher than forecast in Budget 2023.
Strong and prudent fiscal management will help Alberta remain the economic engine of Canada. The government’s new fiscal framework requires the government to use at least half of available surplus cash to pay down debt, freeing up money that can support the needs of Alberta families now and for decades to come. Based on the first quarter update, Alberta plans to eliminate $2.6 billion in taxpayer-supported debt this fiscal year.
“Alberta’s finances remain strong, and thanks to our new fiscal framework, Alberta’s fiscal position is poised to become even stronger. Our continued priorities of paying down debt and saving for the future will ensure we have the capacity to meet Albertans’ needs both today and well into the future.”
After the required 50 per cent of projected available surplus cash is used to pay off maturing debt, remaining surplus cash will be allocated to the Alberta Fund, where it can be used for additional debt repayment, contributions to the Alberta Heritage Savings Trust Fund and one-time initiatives that do not lead to a permanent increase in government spending. A projected $2.6 billion will be set aside in the Alberta Fund in 2023-24.
Revenue
Revenue for 2023-24 is forecast at $71.1 billion, a $491-million increase from Budget 2023.
Alberta’s robust business environment is attracting investment and people from around the country, driving a projected $1.5-billion increase in corporate and personal income tax revenue.
The corporate income tax revenue forecast has increased by $889 million, following a record-high year in 2022-23. At eight per cent, Alberta’s general corporate income tax rate is the lowest in the country. Alberta’s low taxes remain one reason investors choose Alberta.
Keeping life affordable is a key priority for Alberta’s government, which is why it paused the provincial fuel tax on gasoline and diesel in January. Extending the pause to the end of 2023 will save Albertans and Alberta businesses 13 cents per litre on gasoline and diesel for the rest of the calendar year. As a result, fuel tax revenue is forecast to be reduced by $532 million – money that is going directly back into the pockets of Albertans every time they fill up their vehicle.
Between April 1 and June 30, the price of West Texas Intermediate (WTI) oil averaged US$74 per barrel. It is now forecast to average $US75 per barrel over the course of the fiscal year, $4 lower than the Budget 2023 forecast. The resulting impact on Alberta’s revenue is being offset by a narrower light-heavy oil price differential, which is now forecast to average US$15 per barrel, $5 narrower than at budget.
Bitumen royalties are projected to increase by $515 million in 2023-24; however, overall resource revenue is projected to decrease by $694 million from the budget forecast. Lower natural gas royalties account for most of the projected decrease due to weaker prices, robust North American production and the impact of wildfires on production in Alberta.
Expense
Expense for 2023-24 is forecast at $68.7 billion, a $397-million increase from Budget 2023. The expense increase before the forecast contingency allocation is $1.6 billion. Of this, $397 million is funded by dedicated revenue and $1.2 billion is set aside as a preliminary allocation from the contingency, leaving $323 million unallocated.
The unprecedented wildfire season in the province prompted Alberta’s government to act swiftly and responsibly to ensure the safety of Albertans in affected areas. To date, the government has allocated $750 million for fighting wildfires in the province this year, along with $175 million for uninsurable losses, $75 million of which is expected to be covered by the federal government, and $55 million, mainly for emergency evacuation payments. Alberta’s government will continue to support Albertans during difficult situations like natural disasters.
The operating expense forecast has increased by $179 million, mainly due to a $214-million increase in Health funding that is being fully offset by federal bilateral agreement revenue. Capital grant increases of $170 million are mainly for re-profiling projects from the 2022-23 fiscal year.
Debt servicing costs are forecast to increase $245 million from budget, mainly due to higher interest rates – reiterating the importance of government’s commitment to paying down debt.
Alberta Heritage Savings Trust Fund
The Alberta Heritage Savings Trust Fund is Alberta’s long-term savings account, and the government remains committed to growing it. The fund performed well during the 2023-24 first quarter, earning a two per cent return with a net investment income of $739 million. Its fair value of net assets on June 30 was $21.6 billion, an increase from the $21.2 billion recorded at the end of the previous fiscal year.
Over five years, the fund returned 6.4 per cent, which is 0.6 per cent above the return of its passive benchmark.
Economic outlook
By continuing to grow and diversify Alberta’s economy, Alberta’s government is continuing to exceed expectations. Alberta’s real gross domestic product is now expected to rise three per cent in 2023, up 0.2 percentage points from Budget 2023. Projections by private forecasters show the province is expected to lead the country in economic growth this year.
Robust population growth is supporting Alberta’s labour market and generating demand and activity in Alberta’s economy, ultimately boosting the province’s economic outlook. Although risks and uncertainty persist due to rising interest rates, high consumer prices and other factors, Alberta’s economy remains well-positioned to withstand any challenges that arise.
Quick facts
- The amount of surplus cash available for debt repayment and the Alberta Fund is calculated after several necessary cash adjustments are made.
- In 2023-24, the total amount available for allocation is forecast at $5.2 billion, which includes $5.1 billion carried over from the 2022-23 final results.
From the Fraser Institute
After the Smith government recently announced its shift to a new approach for funding hospitals, known as “activity-based funding” (ABF), defenders of the status quo in Alberta were quick to argue ABF will not improve health care in the province. Their claims are simply incorrect. In reality, based on the experiences of other better-performing universal health-care systems, ABF will help reduce wait times for Alberta patients and provide better value-for-money for taxpayers.
First, it’s important to understand Alberta is not breaking new ground with this approach. Other developed countries shifted to the ABF model starting in the early 1990s.
Indeed, after years of paying their hospitals a lump-sum annual budget for surgical care (like Alberta currently), other countries with universal health care recognized this form of payment encouraged hospitals to deliver fewer services by turning each patient into a cost to be minimized. The shift to ABF, which compensates hospitals for the actual services they provide, flips the script—hospitals in these countries now see patients as a source of revenue.
In fact, in many universal health-care countries, these reforms began so long ago that some are now on their second or even third generation of ABF, incorporating further innovations to encourage an even greater focus on quality.
For example, in Sweden in the early 1990s, counties that embraced ABF enjoyed a potential cost savings of 13 per cent over non-reforming counties that stuck with budgets. In Stockholm, one study measured an 11 per cent increase in hospital activity overall alongside a 1 per cent decrease in costs following the introduction of ABF. Moreover, according to the study, ABF did not reduce access for older patients or patients with more complex conditions. In England, the shift to ABF in the early to mid-2000s helped increase hospital activity and reduce the cost of care per patient, also without negatively affecting quality of care.
Multi-national studies on the shift to ABF have repeatedly shown increases in the volume of care provided, reduced costs per admission, and (perhaps most importantly for Albertans) shorter wait times. Studies have also shown ABF may lead to improved quality and access to advanced medical technology for patients.
Clearly, the naysayers who claim that ABF is some sort of new or untested reform, or that Albertans are heading down an unknown path with unmanageable and unexpected risks, are at the very least uninformed.
And what of those theoretical drawbacks?
Some critics claim that ABF may encourage faster discharges of patients to reduce costs. But they fail to note this theoretical drawback also exists under the current system where discharging higher-cost patients earlier can reduce the drain on hospital budgets. And crucially, other countries have implemented policies to prevent these types of theoretical drawbacks under ABF, which can inform Alberta’s approach from the start.
Critics also argue that competition between private clinics, or even between clinics and hospitals, is somehow a bad thing. But all of the developed world’s top performing universal health-care systems, with the best outcomes and shortest wait times, include a blend of both public and private care. No one has done it with the naysayers’ fixation on government provision.
And finally, some critics claim that, under ABF, private clinics will simply focus on less-complex procedures for less-complex patients to achieve greater profit, leaving public hospitals to perform more complex and thus costly surgeries. But in fact, private clinics alleviate pressure on the public system, allowing hospitals to dedicate their sophisticated resources to complex cases. To be sure, the government must ensure that complex procedures—no matter where they are performed—must always receive appropriate levels of funding and similarly that less-complex procedures are also appropriately funded. But again, the vast and lengthy experience with ABF in other universal health-care countries can help inform Alberta’s approach, which could then serve as an example for other provinces.
Alberta’s health-care system simply does not deliver for patients, with its painfully long wait times and poor access to physicians and services—despite its massive price tag. With its planned shift to activity-based funding, the province has embarked on a path to better health care, despite any false claims from the naysayers. Now it’s crucial for the Smith government to learn from the experiences of others and get this critical reform right.
Nadeem Esmail
Senior Fellow, Fraser Institute
2025 Federal Election
Group that added dozens of names to ballot in Poilievre’s riding plans to do it again
From LifeSiteNews
The ‘Longest Ballot Committee’ is looking to run hundreds of protest candidates against Conservative leader Pierre Poilievre in an upcoming by-election in the Alberta.
A group called the “Longest Ballot Committee” is looking to run hundreds of protest candidates against Conservative Party leader Pierre Poilievre in an upcoming by-election in the Alberta Battle River–Crowfoot riding, just like they did in his former Ottawa-area Carelton riding in last week’s election.
The Longest Ballot Committee is a grassroots group that packs ridings with protest candidates and is looking to place 200 names in the Battle River–Crowfoot riding. The riding was won by Conservative-elect MP Damien Kurek who garnered over 80 percent of the vote, but has since said he is going to vacate his seat to allow Poilievre to run a by-election and reclaim his seat in Parliament in a Conservative-safe area.
In an email to its followers, the committee said “dozens and dozens” of volunteers are ready to sign up as candidates for the yet-to-be-called by-election. The initiative follows after the group did the same thing in Poilievre’s former Carelton riding which he lost last Monday, and which saw voters being given an extremely long ballot with 90 candidates.
The group asked people who want to run to send them their legal name and information by May 12, adding that if about 200 people sign up they will “make a long ballot happen.”
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