Oil revenues, taxes nudge up Alberta’s projected surplus to $5.5B | CBC News

Higher-than expected revenue from income taxes and non-renewable resource revenues are bumping Alberta’s expected surplus up to $5.5 billion this year, the province’s latest financial statements say.

“Alberta continues to stand out as a leader when it comes to fiscal stability and economic resilience in the midst of so much global uncertainty,” Finance Minister Nate Horner said in a press release Thursday.

Rebounding oil prices, a narrower-than-expected gap between the price of Canadian oil and the U.S. benchmark, and one extra project paying oil royalties at a higher rate all helped to improve the province’s projected revenue by $3.7 billion more than February’s budget predicted.

The second-quarter update, released Thursday, shows planned expenses for the year are up 0.7 per cent, and include additional spending on health care, advanced education, mental health and addiction and education.

A law introduced earlier this year that set new rules for how the government must manage its finances requires leaders to dedicate half of any surplus to paying down debt. 

That would send $3.2 billion to debt payments this year, leaving Alberta with $76.1 billion in taxpayer-supported debt by fiscal year’s end.

Another $1.6 billion in surplus will flow into the Alberta Fund, a new savings account the government also created this year. Officials said there is no immediate plan to spend that money.

An extraordinary wildfire season and punishing drought that hammered livestock producers prompted the government to spend most of its $1.5-billion disaster contingency fund in the first six months of the fiscal year.

Complete elimination of the provincial gas tax is ending come Jan. 1, 2024. 

However, a program to provide relief at the pumps based on the price of the benchmark West Texas Intermediate oil will continue. The provincial gas tax is usually 13 cents per litre if the price of WTI is below $80 US per barrel. 

That price will be nine cents per litre at most, for the first three months of 2024, to prevent sticker shock, the province says.

If the WTI price exceeds $80 US per barrel, the gas tax will be nine cents per litre. If the price is higher than $85 US/bbl, the tax is 4.5 cents per litre. And if the oil price exceeds $90 US/bbl, the gas tax is eliminated.

More to come…