This release was issued under a previous government.
The 2016-17 deficit is forecast to be $10.8 billion, a $78-million decrease since the first quarter, as reported in the Second Quarter Fiscal Update and Economic Statement. The deficit is $449 million higher than estimated at budget, due to the impact of the Wood Buffalo wildfire and other factors.
Despite ongoing challenges and high unemployment, there are some hopeful signs for Alberta’s economy. The province added 25,000 jobs in the last three months, manufacturing shipments have increased in recent months, the value of Alberta’s exports has increased since April and drilling activity is picking up from its lows.
“While it’s too soon to say Alberta’s economy turned a corner, there are some hopeful signs that it’s stabilizing. We are keeping a steady hand on the tiller and sticking to our approach of controlling spending, protecting critical public services, and supporting job growth and the diversification of our economy.”
The government is maintaining the forecast West Texas Intermediate (WTI) oil price at US$45/bbl, the same as at first quarter, but US$3 higher than estimated at budget. Government is also retaining the full $700-million risk adjustment to account for uncertainty in the global energy market.
Forecast revenue is up $1.3 billion from Budget 2016, primarily due to increased non-renewable resource revenue, federal transfers and investment income.
Operating expense has increased by a net total of $556 million from budget. This includes a second quarter increase of $100 million to address higher caseloads for Income Support, Assured Income for the Severely Handicapped and other support programs.
Following two years of contraction, Alberta’s economy is expected to grow by 2.3 per cent in 2017, supported by wildfire reconstruction, a rebound in oil production, additional investments in public-sector infrastructure and a modest improvement in oil prices.
2016-17 Second quarter forecast ($ millions)
|
Full-year forecast |
Budget 2016-17 |
Q2 forecast |
Change from Budget |
|
Income taxes |
$15,730 |
$15,027 |
$(703) |
|
Non-renewable resource revenue |
1,364 |
2,124 |
760 |
|
Other revenue |
24,341 |
25,547 |
1,206 |
|
Total revenue |
41,435 |
42,698 |
1,263 |
|
Operating expense (net of in-year savings) |
44,094 |
44,650 |
556 |
|
Disaster/emergency assistance expense |
246 |
1,276 |
1,030 |
|
Other expense |
6,757 |
6,883 |
126 |
|
Total expense |
51,097 |
52,809 |
1,712 |
|
Risk adjustment |
(700) |
(700) |
- |
|
Deficit |
$(10,362) |
$(10,811) |
$(449) |
Energy and economic assumptions
|
Energy and economic assumptions |
Budget 2016 |
Q2 forecast |
Change from Budget |
|
WTI (US$/bbl) * |
42 |
45 |
3 |
|
Exchange rate (US¢/Cdn$)* |
73.5 |
77.0 |
3.5 |
|
Real GDP growth (%)** |
-1.4 |
-2.8 |
-1.4 |
|
Unemployment rate (%)** |
8 |
8 |
- |
*2016-17 fiscal year
**2016 calendar year
6-Month Actuals ($ millions)
|
April 1 to September 30 |
Budget |
Actuals |
Change from Budget |
|
Revenue |
$20,506 |
$22,109 |
$1,603 |
|
Expense |
25,939 |
26,987 |
1,048 |
|
Deficit |
$(5,433) |
$(4,878) |
$555 |