Alberta Projects $4.6 Billion Surplus Amid Economic Uncertainty
Alberta is projecting a $4.6 billion surplus this fiscal year, higher than its previous estimate of $2.9 billion made in the first quarter update. The surplus comes from higher-than-expected income tax revenue and non-renewable resources, but Finance Minister Nate Horner cautioned that the projection comes with significant risks.
The surplus is based on a projected average price of West Texas Intermediate (WTI) oil of $74 per barrel. Oil prices have been highly volatile, fluctuating between $65 and $75 per barrel due to ongoing geopolitical uncertainty. Adding to the risk are the looming tariff threats from U.S. President-Elect Donald Trump, which could hammer the Canadian economy. However, most analysts believe Alberta crude will likely be exempt, given the province’s status as the largest crude supplier to the United States.
Despite the financial windfall, the opposition NDP criticized the government for failing to address the struggles of everyday Albertans. Court Ellingson, NDP Shadow Minister for Finance, accused the government of relying on high unemployment, high inflation, and low wages to support its fiscal strategy. The NDP has called for the surplus to be directed toward economic diversification and job creation.
The province plans to use the extra revenue to pay down debt and invest in the Alberta Heritage Savings Trust Fund. However, with the surplus heavily swayed by geopolitical factors and international trade dynamics, Horner cautioned that there could be challenges, but he believes Alberta is in a good position to navigate these uncertainties.
