June 24, 2003 “The results show this government made the right decisions. We faced challenges head-on and we began laying the groundwork to make Alberta even stronger.” Minister of Finance Pat Nelson Government Annual Report shows Alberta’s strong performance despite global economic uncertainty Annual Report Highlights
Budget 2002 was released during a time of global economic uncertainty. Despite the challenges at the time, available dollars were targeted to priority areas. Health and Wellness ministry spending was 8 per cent higher in 2002-03 than 2001-02 and Learning ministry spending was 6 per cent higher than the previous fiscal year. “The government made tough decisions to protect priority programs, but they were the right decisions for the times,” said Nelson. “We recorded another balanced budget, Albertans continue to have the lowest personal taxes in Canada and the highest disposable income per capita of any province in 2002.” The 2002-03 economic cushion was $1.989 billion, compared to the $724 million budget estimate and a forecast of $1.8 billion in the Third Quarter fiscal update. At Third Quarter, the government announced the surplus would go towards debt repayment, the Capital Account and the Alberta Sustainability Fund. As a result, $525 million of the economic cushion will go to debt repayment, $910 million was deposited into the Capital Account to fund projects in the capital plan starting in 2003-04 and the remainder is seed money for the Alberta Sustainability Fund. The revenue increase from budget is attributed to higher non-renewable resource revenue, which was partially offset by lower investment income and increased spending for disaster assistance. Non-renewable resource revenue was $7.1 billion, $3.4 billion higher than estimated at budget and $702 million higher than the Third Quarter forecast. The increase is due to higher energy prices caused primarily by the war in Iraq, labour unrest in Venezuela and a colder than normal fall and winter in North America. Natural gas prices averaged Cdn$4.98 per mcf, which was almost two dollars more than the budget estimate. Oil prices came in just over nine dollars higher than the budget estimate, averaging US$29.13 per barrel. “We all know forecasting oil and gas prices is difficult,” Nelson said. “There is no way you can anticipate the types of events that occurred around the world this past year, or the types of weather patterns we saw. That’s why we’ve taken steps to protect Alberta’s fiscal plan against volatile energy prices, starting in 2003-04.” Predictable and sustainable funding is a key component of the new fiscal framework that was brought forward and approved by government in 2002-03. “Albertans don’t want our spending plans disrupted by volatility in oil and gas revenue. The government has established the Alberta Sustainability Fund so that school boards, health authorities and municipalities can count on a predictable level of funding even if oil and gas prices drop below forecast levels.” The Alberta economy performed well, despite slower than anticipated economic growth in 2002. Alberta continues to have the highest gross domestic product (GDP) and investment per capita among the provinces. The number of businesses in Alberta increased by 2.4 per cent and Alberta registered the second-lowest unemployment rate among provinces at 5.3 per cent. Click on the links for: - 30 - Backgrounder - Charts (click here for pdf version of backgrounder)
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