Alberta says it will post a higher-than-expected budget deficit of $10.3 billion in the coming fiscal year, raising spending as its economy recovers.
The province has benefited from higher global crude prices since a long decline bottomed out at $26.00 U.S. a barrel last year. That recovery, along with a pickup in manufacturing exports, have boosted Alberta's economy, which will grow by 2.6% in 2017.
Thursday's budget revealed that non-renewable resources revenue, including from oil and gas, will increase to $3.8 billion. The projected deficit for 2017-18 was higher than the $10.1-billion forecast last year, but lower than 2016-17's $10.4 billion, which itself had been revised to become lower than expected.
But the New Democratic Party government of Premier Rachel Notley, which swept to victory in 2015, said it was prepared to tolerate deficits. Thursday's budget, with $29.5 billion in capital spending over four years, reiterated that the province would protect public services. Fiscal 2017-2018 begins on April 1.
Finance Minister Joe Ceci said an increase of 2.2% of the province's operating expenses to $55 billion was more than previously forecast, but the government may have a lower deficit for 2017-18 if it does not encounter unexpected spending.
Alberta will borrow heavily to fund its fiscal plan, with total debt hitting $71.1 billion, or 19.5% of nominal GDP, by 2019-20. The NDP said the province's target of 2024 for balancing the books remains.
Alberta forecast newly approved pipelines that move its landlocked crude will spur production, boosting revenue from royalty payments by up to $9 billion between 2017 and 2022.
