Alberta Looking Forward to a Decreased Deficit

Sep 21
06:06

2010

Daniel Kepka

Daniel Kepka

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Alberta is breathing a somewhat optimistic sigh of relief. Rather than the anticipated $6.9 billion budget deficit predicted in August, that amount ha...

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Alberta is breathing a somewhat optimistic sigh of relief. Rather than the anticipated $6.9 billion budget deficit predicted in August,Alberta Looking Forward to a Decreased Deficit  Articles that amount has been reduced to a $4.3 billion dollar figure. The new figures were announced on Thursday morning by Iris Evans, Calgary's Finance Minister.

Higher oil revenues as well as a recovering economy have both contributed to the better than expected financial picture. The government's effort to curb spending has also helped, taking $430 million off of the original deficit figure. The government is still planning to go ahead with an additional $2 billion in spending reductions in the hopes that the province can return to having a budget surplus by the fiscal year 2012-2013.

The province will cover the deficit by tapping the Sustainability Fund, which holds about $17 billion on account designed to protect against financial emergencies. This way there will be no interest to pay back on borrowed funds.

In calculating the budget figures, Alberta figured oil prices at $67.51 USD per barrel, which is about $12 higher than originally forecast. Natural gas prices have not fared as well; in fact they have decreased. Original projections were $5.50 per gigajoule (gas energy use measurement) and now they stand at roughly $3.25 per gigajoule.

Spending in the province will be a bit more than anticipated due to resources needed to fight the mountain pine beetle invasion and the active forest fire season. More people were out of work and also required income support and assistance with their health benefits. The spending forecast now sits at $37 billion, roughly $575 million more than expected.