Alberta deficit to shrink as oil price surge drives growth
BNN Bloomberg
Alberta slashed its deficit forecast for the current fiscal year by 68 per cent as surging oil prices drive economic growth in the western Canadian province.
Alberta slashed its deficit forecast for the current fiscal year by 68 per cent as surging oil prices drive economic growth in the western Canadian province.
The shortfall is now estimated at $5.8 billion (US$4.5 billion) for the year ending March 31, $12.4 billion lower than in the original budget, according to the province’s fiscal update released Tuesday.
Holder of the world’s third-largest oil reserves, Alberta has seen a rising windfall from oil royalties this year after the pandemic curtailed oil demand in 2020, prompting oil sands producers to slash production.
The province’s revenue of $57.9 billion will exceed the original forecast by $14.2 billion. Expenses also rose by $1.8 billion from the previous forecast to $63.7 billion after a $1.4 billion provision was added for potential crop insurance indemnities because of drought conditions this year.
After contracting 7.9 per cent last year, the province’s economy will grow 6.1 per cent in 2021. Oil and gas investment, which plunged 37 per cent in 2020, will rise back to 2019 levels by next year, reaching $26 billion.
