Q1 update: Paying down debt and saving for the future
Strong economic activity this year will see Alberta make historic investments in savings and debt reduction.
High revenue forecast for bitumen royalties, other resource revenue and corporate income taxes have increased the province’s forecast surplus to $13.2 billion for 2022-23.
This year’s surplus enables the government to make the largest single-year debt repayment in Alberta’s history, repaying $13.4 billion in debt that comes due this fiscal year. The government will also allocate $5.2 billion to debt coming due in 2023-24.
The government will make the largest ever single-year investment in the Heritage Fund, retaining the fund’s remaining 2021-22 net investment income of $1.2 billion and allocating $1.7 billion, for a total investment of $2.9 billion. This is over and above the $705 million retained for inflation-proofing last year.
“Alberta’s commitment to fiscal discipline and our unrelenting focus on economic growth has helped bring about an extraordinary turnaround in our financial situation. We promised Albertans we would get our fiscal house in order and that’s exactly what we’ve done. Now, we’re paying down debt so future generations won’t have to, saving more for a rainy day, and putting more money in Albertans’ pockets.”
“For too long, governments in Alberta refused to exercise fiscal discipline during boom times. Those days are over. Alberta’s government is making the prudent decision to save and invest surplus revenues so future generations can benefit from the prosperity of today.”
Indexing personal income taxes
The province is fulfilling a commitment made in 2019 to index personal income taxes to inflation, retroactive to the 2022 tax year. The basic personal tax amount is rising to $19,814 and will rise again in 2023.
An additional 80,000 to 95,000 Albertans will pay no provincial personal income tax by 2023, on top of the approximately 1.3 million tax filers who already pay no provincial personal income tax.
Many Albertans will first see the benefit of indexation through lower tax withholdings on their first paycheques of 2023. In addition, since indexation will resume for 2022, Albertans will receive larger refunds or owe less tax when they file their 2022 tax returns in spring 2023. In total, resuming indexation for 2022 and subsequent years will save Albertans an estimated $304 million in 2022-23, $680 million in 2023-24 and $980 million in 2024-25.
Indexing personal income taxes to inflation will contribute further to Alberta’s strong tax advantage: Albertans already pay less in overall taxes, with no PST, no payroll tax and no health premiums.
Alberta’s government has already introduced some of the most generous measures to keep more money in the pockets of Albertans, committing $2.4 billion in relief for rising prices, inflation and cost of living, including:
- Providing $300 in relief for 1.9 million homeowners, business operators and farmers over six months through the Electricity Rebate Program.
- Eliminating the 13-cent-per-litre provincial fuel tax until at least the end of September.
- Helping school authorities cover high fuel costs for buses under the Fuel Price Contingency Program.
- Providing natural gas rebates from October 2022 to March 2023 to shield consumers from natural gas price spikes.
- Maintaining Alberta senior benefits for those over 75 years of age, exempting them from the Federal Old Age Security increase.
Other economic growth indicators
Momentum has picked up in Alberta’s labour market. The province has added 68,200 jobs since the beginning of the year and most industries have surpassed employment levels from early 2020, before the pandemic first took hold of the province. Alberta’s unemployment rate fell to 4.8 per cent, the lowest since early 2015. In response to these positive developments, the province has revised its forecast for employment growth to 5.3 per cent, up from 4.1 per cent at budget. The unemployment rate has also been revised down to 5.9 per cent in 2022 from the budget forecast of 6.6 per cent.
Business output has surged in the province on the back of higher demand and prices. While energy products have led the increase, there have been gains across most industries including chemical and forestry products, food manufacturing and machinery. Merchandise exports have risen more than 60 per cent so far this year, while manufacturing shipments are up over 30 per cent.
Higher energy prices are boosting revenues and spending in the oil and gas sector. Strong drilling activity has lifted crude oil production to 3.6 million barrels per day so far this year and is expected to reach a record high this year. Outside the oil and gas sector, companies are proceeding with investment plans, buoyed by solid corporate profits.
Real gross domestic product (GDP) is expected to grow by 4.9 per cent in 2022. This is down slightly from the budget forecast of 5.4 per cent, reflecting softer expectations for growth in consumer spending and residential investment as a result of higher inflation and interest rates. Even so, real GDP is expected to fully recover from the COVID-19 downturn and surpass the 2014 peak for the first time this year. Private sector forecasters are expecting Alberta to have among the highest economic growth in the country this year and in 2023.
- The surplus for 2022-23 is forecast at $13.2 billion, $12.6 billion more than what was estimated in Budget 2022.
- The revenue forecast for 2022-23 is $75.9 billion, $13.3 billion higher than reported in the budget.
- Non-renewable resource revenue is forecast at $28.4 billion in 2022-23, up $14.6 billion from budget’s $13.8 billion forecast.
- Corporate income taxes are up $2 billion from the budget, with a new forecast of $6.1 billion for 2022-23.
- Revenue from personal income taxes is forecast to be $13.3 billion in 2022-23, down $116 million from budget. Indexation of the personal income tax system, retroactive to Jan. 1, 2022, is forecast to lower revenue by $304 million. This is partially offset by increased revenue from rising primary household income.
- Total expense is forecast at $62.7 billion, up slightly from the $62.1 billion estimated at budget.
- Education is receiving an extra $52 million to support the new teachers agreement and to help school authorities pay for bus fuel.
- $279 million the province received from the federal government for the Site Rehabilitation Program is being spent this year instead of next year.
- $277 million is needed to cover the cost of selling oil due to higher prices and volumes.
- The Capital Plan in 2022-23 has increased by $389 million mainly due to carry-over of unspent funds from last fiscal year and an increase of $78 million for highway expansion.
- Taxpayer-supported debt is forecast at $79.8 billion on March 31, 2023, which is $10.4 billion lower than estimated in the budget.
- The net debt-to-GDP ratio is estimated at 10.3 per cent for the end of the fiscal year.
‘Cautiously optimistic’: Lawyer for trucker in Broncos crash waiting on Federal Court
By Bill Graveland in Calgary
A lawyer for a former truck driver who caused the deadly Humboldt Broncos bus crash says he’s cautiously optimistic that he will get the chance to argue against his client’s possible deportation before Federal Court.
In 2019, Jaskirat Singh Sidhu was sentenced to eight years after pleading guilty to dangerous driving causing death and bodily harm in the Saskatchewan crash that killed 16 people and injured 13 others.
The Canada Border Services Agency recommended in March that Sidhu be handed over to the Immigration and Refugee Board to decide whether he should be deported to India.
Michael Greene, Sidhu’s lawyer, said if the Federal Court decides not to hear the case, the deportation process would continue.
He said all written arguments with the Federal Court were filed in July, adding that no news can be good news when waiting for the court to make its decision.
“I’m cautiously optimistic, but I know enough not to get cocky about something like that,” Greene said. “Usually when it takes time, it means you’ve got an arguable case.”
It is also a high-profile case, so a judge might want to be extra careful, he said.
Court was told that the rookie Calgary trucker, a newly married permanent resident, went through a stop sign at a rural intersection and drove into the path of the Humboldt Broncos bus carrying players and staff to a junior hockey league playoff game.
The Parole Board of Canada granted Sidhu day parole in July for six months. He can get full parole after that if he follows conditions, including not contacting the families of the victims.
“Day parole means he is at home. He’s with his wife and I can’t tell you how happy that makes them,” Greene said. “They’re trying to get back to some sense of normalcy.”
Greene said even if he is granted permission to appeal before the court and is successful, the matter would be sent back to Canada Border Services Agency for another review. He said the original officer put all the weight of his decision on the gravity of the harm caused.
“You can’t get your hopes up too high,” Greene said.
“Sometimes the judge will make comments in their decision that will give some guidance to the (CBSA) officers.”
An online fundraising page set up to raise money to help keep Sidhu in Canada has reached more than $42,000.
A message from Sidhu’s wife, Tanvir Mann, a Canadian citizen, said her husband made a “tragic mistake.”
“When confronted by the unimaginable magnitude of the consequences of his mistake, he did everything he could to make things better,” Mann writes.
“I pray that there are people out there who don’t believe that Jaskirat should be deported and are willing to contribute to my fight to be able to live out our lives in Canada.”
The Canada Border Services Agency has previously declined to comment on Sidhu’s case, but said there are multiple steps built into the process to ensure procedural fairness.
Greene said he understands that several of the victims’ families are still angry.
“It’s completely understandable. It is,” he said. “Everybody deals with grief and loss in their own way.”
This report by The Canadian Press was first published Dec. 1, 2022.
Local moving company donating 101 moves to support vulnerable Canadians this holiday season
Submitted by Two Small Men with Big Hearts Moving
Two Small Men with Big Hearts Moving is moving joy, one community organization at a time
This holiday season, Two Small Men with Big Hearts Moving (“Two Small Men”) is spreading joy, seeking to donate 101 moves to community organizations that support at-risk individuals. With inflation at an all-time high and the higher stresses that come with the holiday season and colder weather, Two Small Men is looking to give back to the local markets they operate in during this time of need. This marks the third year for this initiative, which Two Small Men was inspired to launch in 2020, following the hardships of COVID-19. The campaign has grown year-over-year, from 25 donated moves in 2020, to 80 moves in 2021, and now with a goal of 101 moves for 2022.
Two Small Men has a long history in Red Deer having supported the Red Deer Food Bank, Bridges Community Living, and the Alberta Motor Association in past years. They are also always actively searching for new community organizations to partner with to support with donated moving services.
This holiday season, Two Small Men will be helping organizations that support vulnerable communities with everything from moving mass amounts of food to local food banks, to supporting shelters with moving individuals into new homes, to moving toys for underprivileged children.
Two Small Men’s community-first mindset is a key part of its identity. Written right into the name, it is a moving company with a big heart, that cares deeply about giving back. Two Small Men has developed a robust community giving program that supports a variety of non-profit and charitable organizations with in-kind moving services, donation collection initiatives, and other financial contributions. Each year, the business redirects 10 per cent of its annual profits to community giving and other charitable operations. In 2022, Two Small Men projects this will translate into a donation fund of $200,000, with the goal of growing to give $750,000 annually in the next 10 years.
“Moving people’s possessions is our business, but the heart of what we do is really all about supporting the people who make up our communities,” says Addison Parfeniuk, CEO, Two Small Men Big Hearts Moving. “We know that the winter season can be an especially challenging time for many people, and it is our hope that by partnering with local organizations such as the Red Deer Food Bank, we will be able to fill the real needs of real people in the Red Deer community.”
Charitable and non-profit organizations are encouraged to submit their moving needs for consideration in this year’s Season of Giving campaign.
For more information, please visit https://twosmallmen.com/about-us/giving-back/.
About Two Small Men
Two Small Men with Big Hearts Moving is a Canadian moving company focused on supporting customers through every stage of their move, big or small. Founded in 1982, the company has 25 offices across the country with major operations in Calgary, Edmonton, Vancouver, Kelowna, and Winnipeg, and a fleet of more than 100 moving trucks. Committed to giving back to their communities, they donate 10 per cent of their profits each year to relevant charities and organizations that are serving the community.
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