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First quarter report released

Alberta’s updated first quarter forecast reflects higher-than-anticipated costs for fighting wildfires and drought, as well as the reversal of the previous government’s planned health levy and cuts to healthcare and education.

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.”

Joe Ceci, President of Treasury Board and Minister of Finance

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.”

Joe Ceci, President of Treasury Board and Minister of Finance

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


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