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Alberta Q1 budget update a VERY nice surprise


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Q1 update: Alberta’s Recovery Plan is working

The government’s economic outlook has dramatically improved over the first three months of the fiscal year, confirming that Alberta’s Recovery Plan to diversify the economy and create jobs is working.

As of July, Alberta added 73,000 jobs since the beginning of the year and has now recovered nearly 90 per cent of the jobs lost when the pandemic first took hold in the province.

Real gross domestic product (GDP) is expected to grow by 6.7 per cent in 2021, up significantly from the budget forecast of 4.8 per cent. Many economic forecasters, including the Conference Board of Canada and some of the largest Canadian banks, predict Alberta will lead all provinces in growth this year.

“After a historically challenging year, Alberta’s economy is already witnessing signs of recovery and growth. While this indicates Alberta’s Recovery Plan is working, we know there is still more to do to create jobs and restore Alberta’s place as the economic driver of the nation. We will continue to bring spending in line with that of other provinces, attract more investment and get Albertans back to work.”

Travis Toews, President of Treasury Board and Minister of Finance

Increased investment and economic activity has led to the unemployment rate falling to 8.5 per cent, the lowest since the pandemic started.

Oilsands production has risen more than eight per cent in the first half of the year with a quick rebound in bitumen output and drilling activity in June and July – exceeding 2019 levels. Non-energy investment is forecast to grow at about five per cent each year in 2021 and 2022, and will return to 2019 levels this year.

Fiscal situation

Despite these improvements in Alberta’s economy, a sizeable deficit remains, and Alberta’s current fiscal situation is still unsustainable. Alberta will pay $2.6 billion in debt servicing costs this year, which is more than it spends on all but four government departments. With no debt, these taxpayer dollars could be spent on education, health care and other public services.

While the recent increase in energy prices is encouraging, Alberta’s government is aware the situation can change rapidly and the year is far from over. There have been dramatic fluctuations over the past year and a half. Instead of relying on volatile resource revenue, government must control spending.

Alberta’s government continues to hold three fiscal anchors to guide decision-making:

  1. Keeping net debt below 30 per cent of GDP.
  2. Aligning per capita spending with comparator provinces.
  3. Setting a time frame for balancing the budget once the government has a clear picture of the long-term global impacts of the pandemic.

Quick facts

  • The deficit for 2021-22 is forecast at $7.8 billion, $10.5 billion lower than reported in the budget.
  • The revenue forecast for 2021-22 is $55 billion, $11.3 billion higher than reported in the budget.
  • Expense is forecast at $62.7 billion, up $0.8 billion from the budget.
  • Taxpayer-supported debt is forecast at $105.7 billion on March 31, 2022, which is $4.9 billion lower than estimated in the budget.
  • The net debt-to-GDP ratio will be an estimated 19.6 per cent at the end of the fiscal year, well below the province’s goal of 30 per cent.

This is a news release from the Government of Alberta.

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Canada under pressure to produce more food, protect agricultural land: report

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Canada’s agricultural land is under increasing pressure to produce more food as demand grows domestically and internationally, while the industry grapples with limited resources and environmental constraints, a new report found. 

“We need to grow more food on less land and in a volatile climate,” said Tyler McCann, managing director of the Canadian Agri-Food Policy Institute.

The report by the institute released Thursday looks at the pressures on Canada’s agricultural land to produce more food while also mitigating and adapting to the effects of climate change, said McCann. 

Despite Canada being a big country, it doesn’t have as much agricultural land as people might think, said McCann, with the report noting that agricultural land makes up only around seven per cent of the country. 

Because of that, we can’t take what we do have for granted, he said. “We need to be really thoughtful about how we are using our agricultural land.” 

In 2020, Canada was the eighth largest country in terms of cropland area, the report said, with that cropland decreasing by seven per cent over the previous two decades. 

Canada is a major producer and net exporter of agriculture and agri-food products, the report said, exporting $91 billion in products in 2022, and one of the top 10 exporters of wheat, canola, pulses, pork and beef. 

In the coming years, Canada will face increased demand from countries whose populations are growing, the report said. 

“With population growth on one side and climate change on the other, Canada will be amongst an increasingly smaller number of countries that is a net exporter,” said McCann, noting that Canada’s own population is growing, and farmland also needs to be protected against urban sprawl. 

The wildfires clouding Canadian skies this week are a “vivid reminder” of the pressure that extreme weather and the changing climate are putting on the agricultural sector, said McCann. 

“We need to clearly mitigate … agriculture’s impact on climate change. But we also need to make sure agriculture is adapting to climate change’s impacts,” he said. 

One of the ways the world has responded to demand for increased agricultural production over time is to create more agricultural land, in some cases by cutting down forests, said McCann. But that’s not a viable option for Canada, which doesn’t have a lot of land that can be sustainably converted into farmland — and even if it could, doing so could have a variety of adverse environmental effects, he said. 

Some of the practices used to reduce emissions and sequester carbon in agriculture can also improve production output on existing farmland, the report found, such as precision agriculture and no-till practices.

However, intensifying the production of current agricultural land also comes with potential environmental downsides, the report said.

For example, McCann said fertilizer is an important part of sustainable agriculture, but there’s a balance to be struck because excessive use of fertilizer can quickly turn food production unsustainable. 

“We need to be a lot more thoughtful about the inputs that we’re using,” he said, adding the same can be said about the use of technology in agriculture and the policies and programs put in place to encourage sustainable intensification of Canadian agriculture. 

The report recommends that Canada adopt policies that provide financial incentives and technical assistance to farmers and develop regulatory frameworks promoting sustainable land use, as well as promoting education and awareness campaigns, so that the country can “ensure the long-term sustainability of its agricultural sector while protecting the environment.”  

This report by The Canadian Press was first published June 8, 2023.

Rosa Saba, The Canadian Press

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Lawyer tells Alberta’s highest court review board biased in de Grood’s case

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