Alberta ended the fiscal year with an $11.6-billion surplus, exceeding the Budget 2022 projected surplus by $11.1 billion. In 2022-23, the province paid down $13.3 billion in debt, eliminating an estimated $260 million in debt servicing costs annually and reducing the overall debt burden on Albertans.
The province’s strong financial situation also resulted in the market value of the Alberta Heritage Savings Trust Fund growing by $2.5 billion to $21.2 billion. The Heritage Fund’s year-over-year growth was primarily due to actions taken by the Alberta government to retain $1.25 billion in net investment income from 2021-22 and deposit $753 million into the fund.
Growing the Heritage Fund benefits current and future generations of Albertans by ensuring the province is well equipped to handle future uncertainty.
In March of this year, Alberta’s government made legislative changes to ensure the fund continues to grow to support Albertans now and in the future. These changes allow the government to retain all investment income within the Heritage Fund instead of it being transferred to general revenue.
“The 2022-23 year-end report is a very positive one. We promised to keep our economy moving forward and Alberta is reaping the benefits. Albertans can rest easy knowing that Alberta’s prosperity today means more stability tomorrow as we continue to pay down debt and save for the future.”
Alberta's government remains committed to responsible financial management. For the current and subsequent years, Alberta’s new legislated fiscal framework will continue to address Alberta’s unique economic and revenue volatility. The framework requires government to put at least half of any surplus toward debt repayment, with the remainder going toward additional debt repayment, the Heritage Fund or one-time initiatives that do not permanently increase government spending.
Revenue in 2022-23 was $76.1 billion, $13.5 billion more than estimated in Budget 2022, including:
- $25.2 billion in non-renewable resource revenue, $11.4 billion more than estimated in Budget 2022.
- $26.5 billion in tax revenue, $3.5 billion higher than estimated in Budget 2022. This included:
- $8.2 billion in corporate income tax, $4.1 billion more than estimated in Budget 2022.
- $13.9 billion in personal income tax, $543 million more than estimated in Budget 2022.
At the time the Budget 2022 forecast was developed, the global economy was experiencing significant uncertainty related to COVID-19, global growth and energy demand. Budget 2022 was based on a West Texas Intermediate (WTI) forecast of US$70 per barrel in 2022-23.
Oil prices surged last year due to many global factors. WTI reached US$120 per barrel in June 2022 and averaged US$89.69 for the 2022-23 fiscal year, a large reason for the increase in resource and corporate income tax revenue.
Expense in 2022-23 was $64.5 billion, $2.4 billion more than estimated in Budget 2022, including:
- $25.2 billion in health expense to expand capacity and for higher costs in response to Albertans’ evolving health-care needs.
- Investments of $8.9 billion and $6.1 billion in K-12 and post-secondary education, respectively, providing quality learning for Alberta’s youth and building on the province’s world-class post-secondary environment.
Among other factors, the overall increase from Budget 2022 was due to:
- A $2.2-billion increase in operating expense, mainly for health, increased compensation costs from settled agreements, electricity rebates and other affordability measures, and the cost of selling oil.
- A $300-million increase in COVID-19 recovery costs.
- A $167-million increase in debt servicing costs, mainly due to the impact of higher interest rates.
In response to rising living costs, Alberta’s government introduced a series of affordability measures in 2022-23 that helped slow inflation and make life more affordable for Albertans. In 2022-23, the government provided $2.9 billion in affordability supports, including:
- $1.1 billion for the fuel tax relief program, funded through a reduction in revenue.
- $304 million for indexation of the personal income tax system to inflation retroactive to the 2022 tax year, funded through a reduction in revenue.
- $644 million for electricity rebates.
- $441 million for affordability payments to eligible seniors, families with children and vulnerable Albertans on core benefits programs.
- $51 million for indexation of benefit payments to inflation (Alberta Seniors Benefit, Assured Income for the Severely Handicapped, Income Support, Persons with Developmental Disabilities).
To further reduce the cost burden on Albertans, Alberta’s government recently extended the pause on the collection of the provincial fuel tax, saving Albertans 13 cents on every litre of gasoline and diesel until the end of 2023.