Alberta
Alberta announces 11.6 billion surplus
Strong year-end positions Alberta for stability
A solid end to 2022-23 secures Alberta’s long-term financial outlook and provides stability against future economic uncertainty.
Alberta ended the fiscal year with an $11.6-billion surplus, exceeding the Budget 2022 projected surplus by $11.1 billion. In 2022-23, the province paid down $13.3 billion in debt, eliminating an estimated $260 million in debt servicing costs annually and reducing the overall debt burden on Albertans.
The province’s strong financial situation also resulted in the market value of the Alberta Heritage Savings Trust Fund growing by $2.5 billion to $21.2 billion. The Heritage Fund’s year-over-year growth was primarily due to actions taken by the Alberta government to retain $1.25 billion in net investment income from 2021-22 and deposit $753 million into the fund.
Growing the Heritage Fund benefits current and future generations of Albertans by ensuring the province is well equipped to handle future uncertainty.
In March of this year, Alberta’s government made legislative changes to ensure the fund continues to grow to support Albertans now and in the future. These changes allow the government to retain all investment income within the Heritage Fund instead of it being transferred to general revenue.
“The 2022-23 year-end report is a very positive one. We promised to keep our economy moving forward and Alberta is reaping the benefits. Albertans can rest easy knowing that Alberta’s prosperity today means more stability tomorrow as we continue to pay down debt and save for the future.”
Alberta’s government remains committed to responsible financial management. For the current and subsequent years, Alberta’s new legislated fiscal framework will continue to address Alberta’s unique economic and revenue volatility. The framework requires government to put at least half of any surplus toward debt repayment, with the remainder going toward additional debt repayment, the Heritage Fund or one-time initiatives that do not permanently increase government spending.
Revenue
Revenue in 2022-23 was $76.1 billion, $13.5 billion more than estimated in Budget 2022, including:
- $25.2 billion in non-renewable resource revenue, $11.4 billion more than estimated in Budget 2022.
- $26.5 billion in tax revenue, $3.5 billion higher than estimated in Budget 2022. This included:
- $8.2 billion in corporate income tax, $4.1 billion more than estimated in Budget 2022.
- $13.9 billion in personal income tax, $543 million more than estimated in Budget 2022.
At the time the Budget 2022 forecast was developed, the global economy was experiencing significant uncertainty related to COVID-19, global growth and energy demand. Budget 2022 was based on a West Texas Intermediate (WTI) forecast of US$70 per barrel in 2022-23.
Oil prices surged last year due to many global factors. WTI reached US$120 per barrel in June 2022 and averaged US$89.69 for the 2022-23 fiscal year, a large reason for the increase in resource and corporate income tax revenue.
Expense
Expense in 2022-23 was $64.5 billion, $2.4 billion more than estimated in Budget 2022, including:
- $25.2 billion in health expense to expand capacity and for higher costs in response to Albertans’ evolving health-care needs.
- Investments of $8.9 billion and $6.1 billion in K-12 and post-secondary education, respectively, providing quality learning for Alberta’s youth and building on the province’s world-class post-secondary environment.
Among other factors, the overall increase from Budget 2022 was due to:
- A $2.2-billion increase in operating expense, mainly for health, increased compensation costs from settled agreements, electricity rebates and other affordability measures, and the cost of selling oil.
- A $300-million increase in COVID-19 recovery costs.
- A $167-million increase in debt servicing costs, mainly due to the impact of higher interest rates.
Affordability
In response to rising living costs, Alberta’s government introduced a series of affordability measures in 2022-23 that helped slow inflation and make life more affordable for Albertans. In 2022-23, the government provided $2.9 billion in affordability supports, including:
- $1.1 billion for the fuel tax relief program, funded through a reduction in revenue.
- $304 million for indexation of the personal income tax system to inflation retroactive to the 2022 tax year, funded through a reduction in revenue.
- $644 million for electricity rebates.
- $441 million for affordability payments to eligible seniors, families with children and vulnerable Albertans on core benefits programs.
- $51 million for indexation of benefit payments to inflation (Alberta Seniors Benefit, Assured Income for the Severely Handicapped, Income Support, Persons with Developmental Disabilities).
To further reduce the cost burden on Albertans, Alberta’s government recently extended the pause on the collection of the provincial fuel tax, saving Albertans 13 cents on every litre of gasoline and diesel until the end of 2023.
Alberta
Fortis et Liber: Alberta’s Future in the Canadian Federation
From the C2C Journal
By Barry Cooper, professor of political science, University of Calgary
Canada’s western lands, wrote one prominent academic, became provinces “in the Roman sense” – acquired possessions that, once vanquished, were there to be exploited. Laurentian Canada regarded the hinterlands as existing primarily to serve the interests of the heartland. And the current holders of office in Ottawa often behave as if the Constitution’s federal-provincial distribution of powers is at best advisory, if it needs to be acknowledged at all. Reviewing this history, Barry Cooper places Alberta’s widely criticized Sovereignty Act in the context of the Prairie provinces’ long struggle for due constitutional recognition and the political equality of their citizens. Canada is a federation, notes Cooper. Provinces do have rights. Constitutions do mean something. And when they are no longer working, they can be changed.
Alberta
30 million contraband cigarettes valued at $25 million dollars seized in Alberta
New release from Alberta Gaming Liquor and Cannabis (AGLC)
Record setting contraband tobacco seizures result from AGLC investigations
Alberta Gaming Liquor and Cannabis (AGLC) recently concluded several investigations which netted two of the largest contraband tobacco seizures in Alberta history. The combined total of the contraband tobacco seized was 154,800 cartons of contraband cigarettes (30.7 million individual cigarettes). These seizures are a result of the work conducted by AGLC’s Tobacco Enforcement Unit with the assistance of provincial law enforcement agencies.
- In a January 2024 investigation, approximately 43,500 cartons (8.7 million individual cigarettes) were seized. This equates to $7 million in retail value with a provincial tax avoidance of $2.4 million. This included the seizure of 15,000 grams of contraband shisha.
- In April of 2024, 60 wrapped pallets were seized from a warehouse setting netting a total of 111,300 cartons of contraband cigarettes (22 million individual cigarettes) which equates to over $18 million in retail value with a provincial tax avoidance of $6.6 million.
- Criminal Charges are pending in both cases.
“These are significant contraband tobacco investigations involving individuals that are part of organized networks whose proceeds defraud Albertans millions of dollars in tax revenue. AGLC will continue to work with our partners to investigate and disrupt the individuals and organizations involved in these illegal activities as part our commitment to a strong contraband tobacco enforcement program in Alberta.”
- Gary Peck, Vice President, Regulatory Services, AGLC
“Contraband tobacco hurts law abiding businesses that follow the rules, and it costs Albertans millions each year from lost tax revenue. Our government is committed to keeping illegal tobacco off the streets and ensuring that the sale of tobacco products comply with the law.”
- Dale Nally, Minister of Service Alberta and Red Tape Reduction
Over the last nine months, AGLC’s Tobacco Enforcement unit has seized an estimated 35 million contraband cigarettes and 115,000 grams of contraband shisha from across the province. The total potential lost tax revenue is estimated to be more than $10.1 million.
Contraband tobacco:
- is any tobacco product that does not comply with federal and provincial laws related to importation, marking, manufacturing, stamping and payment of duties and taxes;
- comes from four main sources: illegal manufacturers, counterfeits, tax-exempt diversions and resale of stolen legal tobacco; and
- can be recognized by the absence of a red (Alberta) or peach/light tan (Canada) stamp bearing the “DUTY PAID CANADA DROIT ACQUITTÉ” on packages of cigarettes and cigars or pouches of tobacco.
In addition to lost revenues that may otherwise benefit Albertans, illegally manufactured products also pose public health and safety risks as they lack regulatory controls and inspections oversight.
Albertans who suspect illegal tobacco production, packaging and/or trafficking are encouraged to contact AGLC’s Tobacco Enforcement Unit at 1-800-577-2522 or Crime Stoppers at 1-800-222-TIPS (8477).
Under a Memorandum of Understanding with Alberta Treasury Board and Finance, AGLC enforces the Tobacco Tax Act and conducts criminal investigations related to the possession, distribution and trafficking of contraband tobacco products. In 2022-23, provincial revenue from tobacco taxes was approximately $522 million.
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