The budget includes money that comes in (revenue) and money that goes out (expenses). Alberta's annual budget typically covers a year from April to March.
The government gets money from taxes, resource revenue like oil and natural gas royalties, transfers from the federal government, income from investments and revenue from other taxes and fees on specific products and services.
Expense includes all of the programs and services the government provides for Albertans, from funding to support people with disabilities to running a hospital. It also includes staffing costs for people to provide these services.
Balanced, surplus and deficit budget
A budget is balanced if revenue and spending are equal.
If revenue is larger than spending, that's called a surplus. A government can choose to spend more or put that money into savings.
If spending is larger than revenue, this is called a deficit.
Cutting spending, raising taxes and fees and using savings are all ways for government to cover the difference between spending and revenue.
The government may also choose to borrow money and go into debt. Debt can be used to finance large projects, and is a way to get needed infrastructure built faster.
Low interest rates and Alberta's excellent credit rating means government can borrow money at a reasonable rate of interest. That means it's easier to pay this debt back.
Factors that affect budget
Each budget year presents a different challenge for the government, depending on many outside factors:
- constantly changing resource prices make it difficult to predict the province's total revenue - the government is cautious when it comes to revenue forecasting
- Alberta is Canada's fastest growing province and is forecasted to rise to 4.2 million in 2015-16, which means a need for more schools, health facilities and roads
- public priorities may change every year – research and feedback from Albertans help identify these shifting priorities
Budget preparation and introduction
Each ministry outlines how much money they need to support the programs and services they provide to Albertans. Albertans are also consulted on what programs and services are important to them. Proposals and needs are debated, and the budget is drafted.
The Minister of Finance introduces the draft budget to the Legislature for debate. It's a draft piece of legislation, like all laws that go before the Legislature. Members of the Legislative Assembly vote to pass the budget. Once it's passed, it becomes a law after it receives Royal Assent - when the Lieutenant Governor signs it.
Funding for emergencies is over and above what is included in the budget. Funding for these unexpected events are passed separately in the legislature when needed.