The province’s fiscal outlook is improving as revenue increases, and the deficit drops.
According to the mid-year update, the province is seeing improvement in the economy, as jobs are being created through Alberta’s Recovery Plan.
“Our persistent focus on attracting new investment and improving competitiveness for our key sectors is making a difference. We are seeing billions of dollars of new investment and capital deployed in the province, and it’s happening in hydrogen, tech, aerospace, petrochemicals, and many other areas. As we maintain responsible fiscal management, Alberta will reap the rewards of a more stable and prosperous future,” President of Treasury Board and Minister of Finance Travis Toews said.
Drilling activity and oil production have increased, business output is strong with manufacturing shipments and non-energy exports up more than 20 per cent year-to-date.
Housing activity and retail spending are continuing to increase, and private sector construction spending is increasing.
Alberta has gained more than 103,000 jobs since the start of the year, and the unemployment rate fell to 7.6 per cent according to the October jobs report.
The government of Alberta is forecasting an average of 8.8 per cent this year, down from 11.4 per cent in 2020.
Alberta’s updated forecasts show that real gross domestic product (GDP) is expected to grow by 6.1 per cent this year.
Economic improvements in the energy sector are increasing the province’s revenue.
Alberta’s government is committed to three fiscal anchors to guide decision-making including keeping net debt below 30 per cent of GDP, aligning per capita spending with comparator provinces, and balancing the budget and setting a time frame for doing so once the government has a clear picture of the long-term global impacts of the pandemic.
With the Job Creation Tax Cut and continued efforts to make Alberta the most competitive business environment in North America, corporate income tax revenue is forecasted at $2.9 billion for 2021/22.
Revenue is expected to increase by 19 per cent over the next two years to reach $4.1 billion in 2023/24 as growth in investment and profits continue.
The deficit for 2021/22 is forecasted at $5.8 billion, total revenue is forecasted at $57.9 billion, total expenses are forecasted at $63.7 billion, taxpayer-supported debt is forecasted at $101.6 billion, and the net debt-to-GDP ratio is estimated at 19.2 per cent for the end of the fiscal year.
