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.
Related information
Premier Danielle Smith issued the following statement on the swearing in of Canada’s 24th Prime Minister and his new federal cabinet.
“Now that Prime Minister Mark Carney has been officially sworn in, his first item of business should be to call a general election.
“I am extremely concerned that this cabinet includes most of same ministers responsible for the most damaging government policies levelled by Ottawa against Alberta in our over 100-year history. We are gravely concerned that plans to significantly increase the industrial carbon tax will be just as damaging to Alberta’s economy as the consumer carbon tax has been.
“The Prime Minister also has not yet condemned harmful policies such as:
- The proposed emissions cap which continues to threaten our energy sector.
- Bill C-69 which still hampers critical infrastructure projects.
- Failed bail policies which continue to put our communities at risk, undermining the safety and security that Albertans deserve.
- Gun bans that target law-abiding hunters and sport shooters.
- Open border policies which are allowing over two million people per year to enter Canada.
- The plastics ban which puts billions of dollars of investment and thousands of jobs at risk.
- Bill C-59 which bans businesses from communicating about their environmental goals.
- The electric vehicle mandate which calls for 100 percent of new vehicles sold to be electric by 2035.
- The Sustainable Jobs Act, which aims to transition energy workers to a net zero economy as they work to shut down the energy sector.
“Our province has always been a leader in innovation, economic growth, and responsible resource development. We will continue to stand up for our industries, push back against policies that unfairly target Alberta, and fight for a fair deal within Confederation.
“The Prime Minister must put Canada first and call an election immediately to ensure that whoever is leading this country has a four year mandate from all Canadians, especially in light of the ongoing tariff conflict with the U.S.”
Alberta
Highway twinning from Sylvan Lake to Rocky Mountain House among dozens of infrastructure projects beginning in Alberta
Alberta’s government is investing in roads, bridges, and water infrastructure to strengthen the economy and meet the needs of the province’s growing population.
As Alberta’s population continues to grow so does the need for safe, reliable and effective infrastructure to support communities across the province, attract investment and boost economic development. Maintaining and expanding the provincial road and bridge network is vital for growing communities and expanding market access for local industry.
If passed, Budget 2025 would invest more than $8.5 billion for the Ministry of Transportation and Economic Corridors’ three-year Capital Plan, a $333.7-million increase compared with Budget 2024. This total includes more than $4 billion over three years for transportation infrastructure projects to benefit rural communities across the province, as well as $2.1 billion over three years for projects in the Calgary region, and $2 billion for projects in the Edmonton region.
“We are investing in the transportation and water infrastructure our communities need to address rapid growth, promote economic development and support a high quality of life. These investments help ensure our province remains the best place in Canada to live, work and raise a family.”
The total capital investment in this year’s budget includes $2.6 billion for planning, design and construction of major highway and bridge projects. This work will create thousands of jobs across Alberta, improve traffic flow, and support the development of major trade corridors through projects such as twinning Highway 3 and Highway 11, and major improvements to Deerfoot Trail and Highway 881. Capital investment funding also includes more than $186 million over three years for more than 50 engineering projects to address future infrastructure needs as the province continues to grow.
“These investments in Calgary’s roads and bridges are critical to supporting our growing city. Improved infrastructure means safer commutes, better connections for businesses and a stronger foundation for future growth.”
If passed, Budget 2025 would also include a $1.7-billion investment over three years for capital maintenance and renewal, which extends the life of the province’s existing road and bridge network, keeping the highway network safe and helping industry create and maintain well-paying jobs.
“Building and fixing roads and bridges improves the productivity of Alberta’s economy. Budget 2025 continues investing in critical infrastructure using local materials and labour. The ARHCA applauds Alberta’s leadership and commitment to all modes of trade-enabling transportation.”
In addition to improving and maintaining the provincial highway network, Alberta’s government has allocated $3.9 billion for capital grants to municipalities over the next three years. This includes funding for LRT projects in Edmonton and Calgary, as well as $5 million in new funding to support planning work for a new transit solution connecting the Calgary airport terminal with the future Blue Line LRT extension station.
“Investing in infrastructure is critical to establishing a solid foundation for economic growth, sustainability and thriving communities. As our population continues to grow, we must make smart investments in roads, bridges, water and transportation infrastructure to ensure our communities and businesses remain vibrant, connected and ready for the future.”
If passed, targeted investments in Budget 2025 would also support the growth and prosperity of rural communities by providing $126.8 million over three years to municipalities through the Strategic Transportation Infrastructure Program. This program helps smaller municipalities improve critical local transportation infrastructure.
Additionally, ongoing capital grants totalling $519.7 million over three years in water and wastewater infrastructure will ensure Albertans in every community have reliable access to clean drinking water and effective wastewater services.
Finally, Budget 2025 would provide $240.1 million to build and repair water management infrastructure, including dams, spillways, canals and control structures. This investment provides irrigation for the agriculture sector and flood mitigation for Alberta communities.
Budget 2025 is meeting the challenge faced by Alberta with continued investments in education and health, lower taxes for families and a focus on the economy.
Quick Facts
Regional Highlights
North region
- Budget 2025, if passed, invests $1.25 billion over three years in road and bridge construction projects to benefit the North region, including:
- $101 million for Highway 63 twinning, north of Fort McMurray
- $141 million for Highway 881 safety and road improvements
- $87 million for construction of the La Crete bridge
- $69 million for Highway 40 grade widening between Hinton and Grande Cache
- $7 million for the La Loche Connector road – extending Highway 956 from La Loche, Saskatchewan to Fort McMurray
- $4 million for twinning Highway 40 south of Grande Prairie
- $127.5 million for Highway 60 Capital Improvements
Central region
- Budget 2025, if passed, invests $1.4 billion over three years in road and bridge construction projects to benefit the Central region, including:
- $208 million for Highway 11 twinning between Sylvan Lake and Rocky Mountain House
- $98 million for the Vinca Bridge replacement on Highway 38 (near Redwater) as part of work to enhance the high-load corridor
South region
- Budget 2025, if passed, invests $363 million over three years in road and bridge construction projects to benefit the South region, including:
- $106 million for Highway 3 twinning (between Taber and east of Burdett)
- $92 million for the Highway 2 Balzac Interchange Replacement
- $24 million for the Highway 1A upgrade (Stoney First Nation)
- $9 million for the QEII Highway and 40th Avenue interchange ramp (near Airdrie)
Calgary
- Budget 2025, if passed, invests $2.1 billion over three years in road and bridge construction projects, and municipal grants to benefit the Calgary region, including:
- $173.1 million for the Calgary Rivers District and Event Centre
- $484.8 million for Deerfoot Trail upgrades
- $62.4 million for the Springbank Off-stream Reservoir (SR1) project
- $11.9 million for the Bow River Reservoir (Ghost Reservoir Infrastructure Project)
- $100 million for the Calgary Ring Road (West Stoney Trail)
- $8 million for the completion of the Highway 201 Bow River Bridge on the southeast Stoney Trail
- $26.5 million for the completion of the Stoney Trail and Airport Trail interchange
Edmonton
- Budget 2025, if passed, invests $2 billion over three years in road and bridge construction projects to benefit the Edmonton region, including:
- $31.9 million for the Ray Gibbon Drive expansion
- $31 million for the Terwillegar Drive widening from Rabbit Hill Road to Windermere Boulevard
- $52.7 million for the Terwillegar Drive Expansion improvements to the interchange at SW Anthony Henday Drive.
- $20.3 million for Highway 16A and Range Road 20 Safety Improvements
- $17.2 million for Highway 19 twinning
- $40.2 million for the Highway 2 and 65 Avenue Interchange in Leduc
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