First quarter report released

The first quarter results show an increase of $456 million for disaster assistance, including agricultural drought relief and wildfire fighting costs, over and above the $301 million allocated in the March 26 budget.

“The first quarter update highlights the difficult choices we have ahead as we build a budget that is prudent, while creating jobs and protecting the frontline services that Albertans count on. There is no doubt many Alberta families and businesses are feeling the effects of the dramatic drop in oil prices. That’s why our government is focused on building a plan for job creation and diversification of our economy.”

The forecast includes an increase of $1.4 billion in operating expenses, reflecting the re-investments in Health, Education, Innovation and Advanced Education, and Human Services. These increased expenses are partially offset in 2015-16 by new revenue measures announced in the spring legislative session.

Revenue is forecast at $44.3 billion, $1 billion higher than previously forecast. This reflects a net increase of $497 million in income tax revenue this year, mainly due to the government’s introduction of a graduated income tax system that takes effect October 1; a two-percentage-point corporate income tax increase; and a larger than expected personal income tax base. This forecast also accounts for the elimination of the previous government’s planned health levy. 

“Forecasts indicate our economy will recover in 2016. In the meantime, Albertans can trust that we will continue to be fiscally responsible while investing in their priorities: health care that’s there when we need it, good schools and a quality education for our children, and support for our most vulnerable families.”

The forecast released today was finalized at the end of July and does not reflect the dramatic drop in oil prices since then.

2015-16 First Quarter forecast ($ millions)

Full year forecast	Budget 2015-16	Q1 forecast	Change from Budget
Income Taxes	$16,228	$16,725	+497
Non-renewable resource revenue	$2,869	$3,579	+710
Total Revenue	$43,318	$44,338	+1,020
Operating Expense	$42,030	$43,444	+1,414
Disaster/Emergency Assistance Expense	$301	$757	+456
Total Expense	$48,388	$50,222	+1,832
Deficit	$5,070	$5,884	-814

Balance sheet	2016 year-end forecast at Budget	2016 year-end forecast at Q1	Change from Budget
Contingency Account	$2,402	$3,542	+1,140
Liabilities for Capital Projects	$17,692	$18,278	+586

Energy and Economic Assumptions	March outlook for 2015-16	July outlook for 2015-16	Change
WTI (US$/bbl)	$54.84	$55.85	+1.01
Exchange Rate (US¢/Cdn$)	81.5¢	79.5¢	-2.0
	March outlook for 2015	July outlook for 2015
Real GDP Growth	0.4%	-0.6%	-1.0
Unemployment Rate	5.7%	5.7%	unchanged