Finance
Annual Report
for the fiscal year ended March 31, 2006 - Part 1
September
26, 2006
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Table of Contents
- Part 1
Go to Part
2: Overview
Go to Part
3: Results Analysis
Preface
Public Accounts
2005-06
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
26, 2006 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 Finance 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 financial statements of entities making up the Ministry
including the Department of Finance, regulated funds, provincial
agencies and Crown-controlled corporations for which the Minister
is responsible,
- other financial information as required by the Financial
Administration Act and Government Accountability Act,
either as separate reports or as a part of the financial statements,
to the extent that the Ministry has anything to report, and
- financial information relating to trust funds.
Minister's
Accountability Statement
The Ministry’s Annual Report
for the year ended March 31, 2006, 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 22, 2006 with material economic
or fiscal implications of which I am aware have been considered
in the preparation of this report.
[Original Signed]
Honourable Shirley McClellan
Minister of Finance
September 22, 2006
Message
from the Minister
Alberta observed a number of significant
milestones in the 2005-06 fiscal year. We celebrated our Province's
100th anniversary and it was the first time in 12 years in which
resources were not required for debt reduction.
With our debt-free status and record resource
revenue, we have been able to dedicate the 2005-06 surplus to
addressing Alberta's infrastructure needs and increasing the Province's
savings. Albertans have themselves to thank - they kept us focused
on getting the Province's fiscal house in order.
Regular inflation proofing of the Alberta
Heritage Savings Trust Fund commenced in 2005-06, with the Fund
retaining $382 million to protect its value. As well, the government
deposited $1.75 billion in the Heritage Fund, including $750 million
for the new advanced education endowment.
Alberta's exceptional financial performance
in 2005-06 also permitted increases in other savings: $200 million
in the Alberta Heritage Foundation for Medical Research Endowment
Fund, $100 million in the Alberta Heritage Science and Engineering
Research Endowment Fund, and $250 million in the Alberta Heritage
Scholarship Fund.
The government's fiscal framework was amended
in 2005-06 to reflect the current energy marketplace and the elimination
of the accumulated debt. The limit on resource revenue that can
be used for budget purposes was increased to $4.75 billion.
The Sustainability Fund, created to protect
spending from volatile revenue and the cost of emergencies and
disasters, provided $1 billion to help pay for the costs of disasters
such as floods, forest fires and mountain pine beetles, and to
provide natural gas rebates triggered by high natural gas prices.
Our Province's strong fiscal position continues
to be recognized by international bond rating services. For the
fifth consecutive year, Dominion Bond Rating Service, Moody's
Investor Service, and Standard and Poors rated Alberta as triple
A. We are the only province in Canada with such status.
A competitive tax regime is important to attract
investment and encourage entrepreneurship. Albertans and Alberta
businesses continued to enjoy the lowest overall tax regime in
Canada in 2005-06, as several measures were taken to maintain
Alberta's tax competitiveness.
The Alberta Family Employment Tax Credit was
enhanced by increasing payment amounts and expanding it to include
more children. Senior homeowners began to receive assistance to
protect them from increases to school property taxes.
A review of Alberta's tax system in 2005-06
resulted in changes introduced with Budget 2006: the general corporate
income tax rate was reduced to 10 per cent from 11.5 per cent,
health care insurance premium thresholds were increased, Alberta's
personal income tax system continued to be adjusted to prevent
inflation from increasing taxes, and the basic personal and spousal
credit amounts were increased by an additional $100.
Alberta's resource wealth belongs to all Albertans.
With record resource revenue in 2005-06, the government gave $1.3
billion back to Albertans in the form of the Alberta 2005 Resource
Rebate.
Working or retired, Albertans want to know
their pensions are secure. In 2005-06, we consulted with stakeholders
on proposed regulatory amendments to improve the oversight of
private sector pensions. The changes proposed in 2005-06 followed
legislative amendments approved in the previous fiscal year to
increase the transparency and accountability of pension plans.
Alberta is taking a lead role in reforming
securities regulation. The first phase of the passport system
was implemented across most of Canada in 2005-06, allowing participants
to access multiple markets by meeting certain filing requirements
in only one jurisdiction. We continue to work with our provincial
and territorial partners to enhance investor protection and improve
the competitiveness of Canada's capital markets.
The newly created Automobile Insurance Rate
Board held public hearings and reviewed compulsory premiums in
2005-06. Premiums were reduced in November 2005, bringing total
reductions to 15 per cent since reforms were implemented in the
previous year to make automobile insurance fair and affordable
for Albertans.
Thanks to the hard work and dedication of
Albertans, we were able to make decisions to shape the next Alberta
- with a well-educated workforce, strong fiscal position and a
lead role in Canada - while at the same time looking back at 100
years of the province's history. It is the spirit and determination
of Albertans that will see this province prosper as it heads into
its next 100 years.
[Original Signed]
Shirley McClellan
Minister of Finance
September 22, 2006
Management's
Responsibility for Reporting
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 Finance. 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
and the Minister of Finance 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 executive
of the individual entities within the Ministry.
[Original Signed]
Brian Manning
Deputy Minister of Finance
September 22, 2006
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