Fiscal update shows surplus

Second quarter fiscal results for the province show an operational surplus of more than $1 billion in the first six months of the fiscal year, but finance ministry officials recently warned spending on flood response and recovery has only begun to impact the province’s bottom line.

“It’s good to see positives on the report for the second quarter,” said Little Bow MLA Ian Donovan. “I think that’s good for Albertans. Whether they can hold it at that — I see that Minister Horne is already talking about the ‘bitumen bubble’ again. It’s typical, that’s how the oil price differential goes, it goes up and down, and the differential is spread quite a bit now. That’s to be expected.”

By the end of the 2013/14 fiscal year, operational results are expected to range from a surplus of $250 million to a deficit of $250 million. By September 30, $351 million had been spent on flood assistance efforts.

“Ninety per cent of that will be covered federally, so it’s some give and take, but I still think we need to invest in the flood damaged areas,” said Donovan.

Operational revenue is $20.3 billion in the first half of the fiscal year, $1.4 billion higher than expected. Similar to first quarter, this was due primarily to higher energy prices and increased investment income. Overall, there was a $1.1 billion operational surplus after the second quarter.

“It’s positive that we actually had a $1 billion somewhat of a surplus — it’s an operating surplus, not a total surplus — which is back to how they decide to do their books, which I question a little bit,” said Donovan.

Operational expense was $19.3 billion, an increase of $247 million from the estimate due primarily to an increase in disaster spending offset by an overall drop in operating expense mainly due to delayed health grants. Capital plan results were on track with the budget estimate, with capital spending at $2.4 billion. Direct borrowing for capital purposes was $1.7 billion.

Alberta’s population has passed the four million mark; a record 105,200 net migrants came to the province during the 2013 census year.

Alberta’s real GDP is now expected to expand by 3.3 per cent in calendar year 2013, up from the first quarter forecast. The forecast for economic growth in 2014 has also been revised upwards to 3.5 percent.

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