Alberta
Alberta’s projected surplus balloons: Mid-year budget update
Mid-year update: Keeping Alberta’s finances on track
Alberta’s government continues to manage the province’s finances responsibly with the future in mind.
Alberta continues to lead the nation in economic growth and is forecasting a surplus of $5.5 billion in 2023-24, an increase of $3.2 billion from Budget 2023. The province’s fiscal outlook continued to improve in the second quarter of 2023-24, boosted by strong bitumen royalties and higher income tax revenues.
However, volatile oil prices, continued inflation challenges and uncertainty due to slowing global growth could still affect the province’s finances going forward. Debt servicing costs will be higher than previous years due to higher interest rates, reinforcing the importance of the government’s commitment to balance the budget.
“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. Our second-quarter fiscal update is another positive report, showing strength in Alberta’s finances and economy and positioning us for future growth and prosperity.”
The government continues to spend responsibly, maintaining its commitment to keep funds in the province’s contingency for disasters and emergencies. The government’s new fiscal framework requires the government to use at least half of available surplus cash to pay down debt, freeing up money that can support the needs of Albertans for generations. The government continues to reduce the province’s debt burden and will pay down a forecasted $3.2 billion in debt this fiscal year.
Alberta’s government is turning its focus to developing next year’s budget, so it supports Albertans’ needs and the province’s economic growth while maintaining the government’s commitment to responsible spending within the fiscal framework. Budget 2024 consultations are open and Albertans are encouraged to share their feedback to help set the province’s financial priorities.
Revenue
- Revenue for 2023-24 is forecast at $74.3 billion, a $3.7-billion increase from Budget 2023. The increase is due to increases across different revenue streams. In addition, the price of West Texas Intermediate (WTI) oil is forecast to average US$79 per barrel over the course of the fiscal year, in line with the Budget 2023 forecast.
- Personal and corporate income tax revenue is forecast at $21.8 billion, $1.8 billion higher than at budget.
- Bitumen royalties are forecast at $14.4 billion, an increase of $1.8 billion from budget.
- Overall resource revenue is forecast at $19.7 billion, $1.3 billion higher than the budget forecast.
- Beginning in 2024, Alberta’s government will continue to offer fuel tax relief when oil prices are high, even as the province transitions back to the original fuel tax relief program, which is based on average quarterly oil prices.
- Albertans will save some or all of the provincial fuel tax on gasoline and diesel when oil prices are $80 per barrel or higher during each quarter’s review period.
- Although oil prices have been below $80 in recent weeks, Albertans will continue to save at least four cents per litre on the provincial fuel tax in the first three months of 2024 as the tax is phased back in.
- The government’s fuel tax relief efforts, which include the pause to the end of 2023 and additional savings over the first three months of 2024, are forecast to reduce other tax revenue by $524 million in 2023-24.
Expense
- Expense for 2023-24 is forecast at $68.8 billion, a $481-million increase from Budget 2023.
- Capital grants are up marginally from Budget 2023, but down from the first-quarter forecast, mainly due to funding schedules for Calgary and Edmonton LRT projects.
- Debt servicing costs are forecast to increase $309 million from budget, a reflection of ongoing high interest rates and inflation.
- Total expense has increased by $1.9 billion, $0.5 billion is directly offset by revenue and $1.4 billion is absorbed by the $1.5-billion contingency.
- In total, $123 million of the 2023-24 contingency remains unallocated.
- $1.2 billion in disaster and emergency costs are forecast for the current fiscal year.
- $750 million for fighting wildfires in the province
- $165 million for AgriRecovery to support livestock producers affected by dry conditions
- $253 million to provide financial assistance to communities for uninsurable damage from spring wildfires and summer flooding
- $61 million for evacuation and other support
- The operating expense forecast has increased by $319 million, including an additional:
- $301 million for Health
- $48 million for Advanced Education
- $48 million for Energy and Minerals
- $33 million for Mental Health and Addiction
- $30 million for Education
- $14 million for Indigenous Relations
- Offset by decreases of $187 million for lower-than-expected program take-up of affordability payments and re-profiling of TIER spending to 2024-25.
Alberta Heritage Savings Trust Fund
- The Alberta Heritage Savings Trust Fund’s market value on Sept. 30, 2023, was $21.4 billion, up from the $21.2 billion reported at March 31, 2023.
- The Heritage Fund returned 0.9 per cent over the first six months of 2023-24.
- Over the five-year period ending on Sept. 30, 2023, the Heritage Fund returned 5.9 per cent, which is 0.5 per cent above the return of its passive benchmark. While the Heritage Fund is outperforming its benchmark return, it is below the long-term real return target of 6.9 per cent, again a result of interest pressures.
- The Heritage Fund generated net investment income of $1 billion in the first half of the fiscal year.
Economic outlook
- Alberta’s economy continues to be resilient, with continued growth projected over the three-year forecast.
- Alberta’s real gross domestic product (GDP) is expected to grow 2.8 per cent in 2023, in line with the Budget 2023 forecast.
- Despite interest rate increases, high prices and slower global economic growth, Alberta’s economy is forecast to keep expanding. The pace of growth, however, will be slower compared with the last two years when the province was recovering from the pandemic.
Alberta Fund
- The amount of surplus cash available for debt repayment and the Alberta Fund is determined after a number of required cash adjustments have been made. For 2023-24, this includes $5.1 billion from the 2022-23 final results to start the year.
- The Alberta Fund contribution for 2023-24 is forecast at $1.6 billion.
- Money in the Alberta Fund can be used toward additional debt repayment, the Heritage Savings Trust Fund, or one-time initiatives that do not permanently increase government spending.
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Alberta
Ford and Trudeau are playing checkers. Trump and Smith are playing chess
By Dan McTeague
Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry.
There’s no doubt about it: Donald Trump’s threat of a blanket 25% tariff on Canadian goods (to be established if the Canadian government fails to take sufficient action to combat drug trafficking and illegal crossings over our southern border) would be catastrophic for our nation’s economy. More than $3 billion in goods move between the U.S. and Canada on a daily basis. If enacted, the Trump tariff would likely result in a full-blown recession.
It falls upon Canada’s leaders to prevent that from happening. That’s why Justin Trudeau flew to Florida two weeks ago to point out to the president-elect that the trade relationship between our countries is mutually beneficial.
This is true, but Trudeau isn’t the best person to make that case to Trump, since he has been trashing the once and future president, and his supporters, both in public and private, for years. He did so again at an appearance just the other day, in which he implied that American voters were sexist for once again failing to elect the nation’s first female president, and said that Trump’s election amounted to an assault on women’s rights.
Consequently, the meeting with Trump didn’t go well.
But Trudeau isn’t Canada’s only politician, and in recent days we’ve seen some contrasting approaches to this serious matter from our provincial leaders.
First up was Doug Ford, who followed up a phone call with Trudeau earlier this week by saying that Canadians have to prepare for a trade war. “Folks, this is coming, it’s not ‘if,’ it is — it’s coming… and we need to be prepared.”
Ford said that he’s working with Liberal Finance Minister Chrystia Freeland to put together a retaliatory tariff list. Spokesmen for his government floated the idea of banning the LCBO from buying American alcohol, and restricting the export of critical minerals needed for electric vehicle batteries (I’m sure Trump is terrified about that last one).
But Ford’s most dramatic threat was his announcement that Ontario is prepared to shut down energy exports to the U.S., specifically to Michigan, New York, Wisconsin, and Minnesota, if Trump follows through with his plan. “We’re sending a message to the U.S. You come and attack Ontario, you attack the livelihoods of Ontario and Canadians, we’re going to use every tool in our toolbox to defend Ontarians and Canadians across the border,” Ford said.
Now, unfortunately, all of this chest-thumping rings hollow. Ontario does almost $500 billion per year in trade with the U.S., and the province’s supply chains are highly integrated with America’s. The idea of just cutting off the power, as if you could just flip a switch, is actually impossible. It’s a bluff, and Trump has already called him on it. When told about Ford’s threat by a reporter this week, Trump replied “That’s okay if he does that. That’s fine.”
And Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry. Just over the past year Ford and Trudeau have been seen side by side announcing their $5 billion commitment to Honda, or their $28.2 billion in subsidies for new Stellantis and Volkswagen electric vehicle battery plants.
Their assumption was that the U.S. would be a major market for Canadian EVs. Remember that “vehicles are the second largest Canadian export by value, at $51 billion in 2023 of which 93% was exported to the U.S.,”according to the Canadian Vehicle Manufacturers Association, and “Auto is Ontario’s top export at 28.9% of all exports (2023).”
But Trump ran on abolishing the Biden administration’s de facto EV mandate. Now that he’s back in the White House, the market for those EVs that Trudeau and Ford invested in so heavily is going to be much softer. Perhaps they’d like to be able to blame Trump’s tariffs for the coming downturn rather than their own misjudgment.
In any event, Ford’s tactic stands in stark contrast to the response from Alberta, Canada’s true energy superpower. Premier Danielle Smith made it clear that her province “will not support cutting off our Alberta energy exports to the U.S., nor will we support a tariff war with our largest trading partner and closest ally.”
Smith spoke about this topic at length at an event announcing a new $29-million border patrol team charged with combatting drug trafficking, at which said that Trudeau’s criticisms of the president-elect were, “not helpful.” Her deputy premier Mike Ellis was quoted as saying, “The concerns that president-elect Trump has expressed regarding fentanyl are, quite frankly, the same concerns that I and the premier have had.” Smith and Ellis also criticized Ottawa’s progressively lenient approach to drug crimes.
(For what it’s worth, a recent Léger poll found that “Just 29 per cent of [Canadians] believe Trump’s concerns about illegal immigration and drug trafficking from Canada to the U.S. are unwarranted.” Perhaps that’s why some recent polls have found that Trudeau is currently less popular in Canada than Trump at the moment.)
Smith said that Trudeau’s criticisms of the president-elect were, “not helpful.” And on X/Twitter she said, “Now is the time to… reach out to our friends and allies in the U.S. to remind them just how much Americans and Canadians mutually benefit from our trade relationship – and what we can do to grow that partnership further,” adding, “Tariffs just hurt Americans and Canadians on both sides of the border. Let’s make sure they don’t happen.”
This is exactly the right approach. Smith knows there is a lot at stake in this fight, and is not willing to step into the ring in a fight that Canada simply can’t win, and will cause a great deal of hardship for all involved along the way.
While Trudeau indulges in virtue signaling and Ford in sabre rattling, Danielle Smith is engaging in true statesmanship. That’s something that is in short supply in our country these days.
As I’ve written before, Trump is playing chess while Justin Trudeau and Doug Ford are playing checkers. They should take note of Smith’s strategy. Honey will attract more than vinegar, and if the long history of our two countries tell us anything, it’s that diplomacy is more effective than idle threats.
Dan McTeague is President of Canadians for Affordable Energy.
Alberta
Your towing rights! AMA unveils measures to help fight predatory towing
From the Alberta Motor Association
Know Before the Tow: Towing Rights in Alberta
Predatory towing is a growing concern in major cities across the province. The Alberta Motor
Association (AMA), in partnership with the Calgary Police Service and Calgary Fire Department,
wants to ensure Albertans are not only aware of this emerging issue but also know how to stop
it.
Today, AMA launches Know Before the Tow—a new, provincewide awareness campaign that
empowers Albertans with the knowledge needed to stay confident and in control when faced with
a tow scam. The campaign features a list of five key towing rights that every Alberta driver should
know:
1. You have the right to refuse unsolicited towing services.
2. You have the right to choose who tows your vehicle, and where, unless
otherwise directed by police.
3. You have the right to access your vehicle to retrieve personal items during a
storage facility’s business hours.
4. You have the right to ask if the towing company receives a kickback for taking
your vehicle to a particular storage facility or repair shop.
5. You have the right to a quote prior to service, and an itemized invoice prior to
making payment.
“Being in a collision or broken down at the roadside is stressful enough; the last thing any Albertan
needs is high pressure from an unscrupulous tower,” says Jeff Kasbrick, Vice-President,
Advocacy and Operations, AMA. “These towing rights are clear and remind every Albertan that
they’re in the driver’s seat when it comes to who they choose to tow their vehicle.”
Edmonton and Calgary in particular are seeing increasing reports of predatory towing. Unethical
operators will arrive at a collision or breakdown scene uninvited, create a false sense of urgency
to remove the vehicle, and ultimately leave drivers facing huge fees.
Starting today, Albertans can visit ama.ab.ca/KnowBeforeTheTow to download a digital copy of
their towing rights, helping them feel confident if faced with a tow scam. And soon, all AMA centres
will offer free print versions, which are small enough to tuck in a glovebox.
“Alberta’s towing industry is still highly reputable, with the vast majority of operators committed
to fair and professional service. In fact, AMA and our roadside assistance network is proud to
represent 80% of all private-passenger tows in the province, so our members can be confident
that we’ll always protect them—just as we have for nearly 100 years,” says Kasbrick.
“By knowing your rights and choosing trusted providers like AMA, you can avoid unnecessary
stress, costs, and uncertainty. Because the road to recovery after a collision shouldn’t have to
include fighting for your vehicle.”
Sergeant Brad Norman, Calgary Police Service Traffic Section, says law enforcement continues
to work diligently with first responders and community partners like AMA to put the brakes on
predatory towers, who “are showing up at collision sites and pressuring overwhelmed and
frightened victims into paying high towing rates.”
“Our priority is to ensure the safety of collision victims, the public, and first responders at
collision sites. Part of this effort is educating motorists about their rights so that they Know
Before the Tow that they can say no to unsolicited towing services and choose a reputable
tower of their choice instead,” says Norman. “No one deserves to be taken advantage of after
being involved in a collision.”
To learn more, and to view an expanded version of Alberta towing rights, visit
ama.ab.ca/KnowBeforeTheTow
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