Alberta Revenue Annual Report 2003-04

Please note that the Detailed Financial Statements are available in pdf format only.

The Public Accounts of Alberta are prepared in accordance with the Financial Administration Act and the Government Accountability Act. The Public Accounts consist of the annual report of the Government of Alberta and the annual reports of each of the 24 Ministries.

The annual report of the Government of Alberta released June 29, 2004 contains the Minister of Finance’s accountability statement, the consolidated financial statements of the Province and a comparison of the actual performance results to desired results set out in the government’s business plan, including the Measuring Up report.

This annual report of the Ministry of Revenue contains the Minister’s accountability statement, the audited consolidated financial statements of the Ministry and a comparison of actual performance results to desired results set out in the ministry business plan. This Ministry annual report also includes:

The Ministry’s Annual Report for the year ended March 31, 2004, was prepared under my direction in accordance with the Government Accountability Act and the government’s accounting policies. All of the government’s policy decisions as at September 20, 2004 with material economic or fiscal implications of which I am aware have been considered in the preparation of this report.

The release of the 2004 Annual Report marks the third anniversary of the Ministry of Revenue. Our ministry has faced challenges and celebrated many successes in the past year. We worked towards fulfilling our mandate and took a long-term strategic look at collecting revenues and investing provincial assets.

One of Alberta Revenue's goals is to have a revenue structure that meets Alberta's needs and is consistent with Albertans' values. The Ministry continued its work on the development of a long-term revenue management framework that will contribute to sound strategic decisions about Alberta's revenue structure and policy. Working with other ministries on key issues and initiatives that would affect the overall revenue picture helped to ensure there is a coordinated approach to revenue management.

The Investment Management Division of Alberta Revenue manages investments comprised of provincial endowment funds, public sector pension funds and other government-related funds. Alberta's single largest asset, the Alberta Heritage Savings Trust Fund recorded its first net loss in 2002-03 due to unprecedented volatility in world equity markets. However, the Heritage Fund made strong gains in 2003-04, recording a net increase in fair value of nearly $1.3 billion, completely reversing the loss from the previous fiscal year. This reflects the overall soundness of our investment strategies and policies adopted by Alberta Investment Management.

Alberta has built its tax advantage on a low rate broad-based tax policy. To support this philosophy, the general corporate tax rate was reduced in 2003-04 from 13.0 to 12.5 per cent. This resulted in an overall saving of $94 million in taxes for Alberta businesses in 2003-04.

Alberta Revenue strives to maximize taxpayer self-compliance with corporate and commodity tax programs. In 2003-04, total revenue (net of refunds) collected by Tax and Revenue Administration was $3.368 billion, of which 91.6% was a result of self-compliance. The balance of 8.4% ($282 million) was obtained through the direct efforts of Alberta Revenue staff.

The department broadened its penalty and interest waiver policy to include Canadian corporations that were adversely affected by BSE. In addition, the Tax and Revenue Administration Division implemented an Internet payment service for Corporate Income Tax, Insurance Corporations Tax, International Fuel Tax, Fuel Taxes, Propane Tax, Health Cost Recovery Levy, Tobacco Tax and Hotel Room Tax.

Securities regulation is currently in the midst of a healthy debate across this country. My provincial colleagues and I acknowledge that there is a need to develop a national and international approach to securities regulation, while respecting provinces’ responsibilities in this area. The Inter-Provincial Ministerial Steering Committee, which I am pleased to chair, has been working for about 15 months to find common ground and seek innovative solutions.

Alberta Revenue continues to benefit from a strong team of dedicated professionals who are committed to excellence, to the service of all Albertans and to ensuring revenue policies reflect Albertans' values as our province grows and evolves.

The Ministry of Revenue includes:
• Department of Revenue

• Alberta Heritage Savings Trust Fund

• Alberta Heritage Foundation for Medical Research Endowment Fund

• Alberta Heritage Scholarship Fund

• Alberta Heritage Science and Engineering Research Endowment Fund

• Alberta Risk Management Fund

• Alberta Securities Commission

The executives of the individual entities within the Ministry have the primary responsibility and accountability for the respective entities. Collectively, the executives ensure the Ministry complies with all relevant legislation, regulations and policies. Ministry business plans, annual reports, performance results and the supporting management information are integral to the government's fiscal and business plans, annual report, quarterly reports and other financial and performance reporting. Responsibility for the integrity and objectivity of the consolidated financial statements and performance results for the Ministry rests with the Minister of Revenue. Under the direction of the Minister, I oversee the preparation of the Ministry's annual report, including consolidated financial statements and performance results. The consolidated financial statements and the performance results, of necessity, include amounts that are based on estimates and judgments. The consolidated financial statements are prepared in accordance with the government's stated accounting policies.

As Deputy Minister, in addition to program responsibilities, I establish and maintain the Ministry's financial administration and reporting functions. The Ministry maintains systems of financial management and internal control which give consideration to costs, benefits, and risks that are designed to:

provide reasonable assurance that transactions are properly authorized, executed in accordance with prescribed legislation and regulations, and properly recorded so as to maintain accountability of public money,
provide information to manage and report on performance,
safeguard the assets and properties of the Province under Ministry administration,
provide Executive Council, Treasury Board, the Minister of Finance and the Minister of Revenue any information needed to fulfill their responsibilities, and
facilitate preparation of Ministry business plans and annual reports required under the Government Accountability Act.

In fulfilling my responsibilities for the Ministry, I have relied, as necessary, on the executives of the individual entities within the Ministry.

[original signed]

Robert Bhatia
Deputy Minister

September 20, 2004

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