The Government of
Alberta Annual Report also includes: Consolidated
Financial Statements and Measuring
Up. If you would prefer to download any or all of these
documents as pdf files, click here.
The official version of this
report of the Auditor General, and the information the report
covers, is in printed form.
Introduction
- Table of Contents
Accountability
Statement
The government’s
Annual Report for the year ended March 31, 2006 was prepared under
my direction on behalf of the government in accordance with the
Government Accountability Act and the government’s accounting
policies. All of the government’s policy decisions as at
June 19, 2006 with material economic or fiscal implications have
been considered in the preparation of the Annual Report.
[original
signed]
Shirley
McClellan
Minister of Finance
Budget
2005 - Investing in the Next Alberta
- A Message from the Minister of Finance
The past year marked a new era for Alberta as we began the Province’s
second century. With accumulated debt retired in the previous
year, we were able to celebrate Alberta’s 100th anniversary
with investments in key areas, helping to build the Next Alberta.
We were able to spend wisely, save for tomorrow, and give back
to Albertans.
In 2005-06, the Government of Alberta reinforced advanced education
as one of our top priorities, recognizing that a well-educated
workforce is an important key to continued growth in the Province’s
future. Substantial investments improved access to and affordability
of post-secondary education. An advanced education endowment was
established and Scholarship Fund assets were increased.
We also made significant investments in basic education, allowing
schools to hire new teachers and providing support for local initiatives
to improve student learning and performance. In total, support
for basic and advanced education increased 8.4 per cent, or $533
million.
The government supported new projects to reduce wait times and
improve access to health services. Funding for health care increased
7.2 per cent, or $653 million, and accounted for about 36 per
cent, or $9.7 billion, of the Province’s total expense.
The Government of Alberta made significant contributions to savings.
The Heritage Fund’s value was increased by more than $2
billion, with a $1 billion deposit, $382 million added for inflation
proofing and $750 million added to establish the advanced education
endowment. Another $550 million was deposited into endowments
for scholarships, medical research, and science and engineering
research.
We also gave back to Albertans. In January, $1.3 billion was
provided to Albertans through the Alberta 2005 Resource Rebate.
Alberta’s increasingly diverse economy – in manufacturing,
agriculture and services – contributed to strong employment
growth. Albertans benefited from nearly 27,000 new jobs in the
past year and the lowest unemployment rate in the country.
We also continued to enjoy the highest disposable incomes per
capita and the lowest overall tax burdens in Canada. Indexation
of the personal tax system protected taxpayers from paying higher
taxes due to inflation, and enhancements to the Alberta Family
Employment Tax Credit provided more benefits for working families.
Albertans celebrated their centennial year free from the burden
of accumulated debt. For years we had envisioned what a debt-free
Alberta could be and in the past year we were able to start shaping
it. A well-educated workforce, healthy Albertans, a strong fiscal
footing – this is the Next Alberta.
[original
signed]
Shirley
McClellan
Minister of Finance
Preface
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.
This annual report of the Government of Alberta contains
the Minister of Finance’s accountability statement, the
consolidated financial statements of the Province and the Measuring
Up report, which compares actual performance results to desired
results set out in the government’s business plan.
The annual reports of ministries, released in the fall of each
year, contain Ministers’ accountability statements, the
audited consolidated financial statements of the ministries and
a comparison of actual performance results to desired results
set out in the ministries’ business plans. Each ministry
annual report also includes:
- financial statements of entities
making up the ministry including departments (all departments
combined form the General Revenue Fund), regulated funds, provincial
agencies and Crown-controlled corporations,
- other financial information as
required by the Financial Administration Act and
Government Accountability Act, either as separate reports
or as a part of financial statements, to the extent that the
ministry has anything to report, and
- financial information relating
to accountable organizations and trust funds.
The
Government of Alberta Annual Report is comprised of two parts:
-
Consolidated
Financial Statements, which provide an overall accounting
of the Government’s revenue and spending, and assets and liabilities.
-
Measuring
Up, which reports on the progress that has been made towards
achieving the government’s goals.
Annual
reports for each ministry are published in September and provide
additional detailed information on performance and financial results.
Executive
Summary: Budget 2005 - Investing in the Next Alberta
2005 marked the 100th anniversary of Alberta
as a Province. Fittingly, Budget 2005 also marked a new
era for Alberta.
Budget 2005 was the first budget in twelve years in which
resources were not required for debt reduction, as Alberta had
eliminated its accumulated debt in 2004-05.
This provided an increased ability to invest in
the key opportunities laid out in the Province’s twenty-year
strategic plan. Budget 2005 focused on initiatives to
improve education, address infrastructure requirements, encourage
research and innovation and make Alberta the best place to live,
work and visit.
These strategic investments and a continuing commitment
to fiscal responsibility will help to ensure the Alberta of tomorrow
is even better than the Alberta of today.
MAJOR INITIATIVES
AND OUTCOMES
Fiscal Responsibility
- Alberta recorded a surplus for the twelfth consecutive year.
The $8.7 billion surplus was primarily committed to meeting
infrastructure requirements and savings.
Advanced and Basic Education
- Access and affordability of the post-secondary system were
improved. An advanced education endowment was established and
Scholarship Fund assets were increased.
- Class sizes in the basic education system were reduced with
increased funding to hire more teachers.
Infrastructure
- Support for capital projects increased by over 30 per cent,
including major increases in support for municipal infrastructure
and provincial highways.
Research and Innovation
- Support for research and innovation was increased, including
additional allocations to the Medical Research Endowment Fund
and the Science and Engineering Research Endowment Fund.
Best Place to Live, Work and Visit
- Alberta Advantage – Alberta had the strongest economic
growth among provinces. Alberta’s tax advantage was strengthened.
$1.3 billion was provided to Albertans through the Alberta
2005 Resource Rebate.
- Health – $9.7 billion was provided for health-related
services. This was the highest per capita spending level in
the country. Wait times for health services were reduced and
improvements were made to continuing care.
- Helping Albertans – Support for seniors, Assured Income
for the Severely Handicapped (AISH) recipients, affordable housing
and supportive living were increased.
- Other – Policing and the justice system were strengthened
and increased support was provided for tourism.
NOTE ON REPORTING ENTITY
The audited financial statements include a larger reporting entity
than the financial information provided in the budget and quarterly
updates.
- For the first time, the net equity of Crown-controlled organizations
in the SUCH sector (schools, universities, colleges and health
authorities) has been consolidated in the audited statements.
This added $345 million to 2005-06 revenue.
- The change in pension obligations is also included in the
audited statements. This added $200 million to expense in 2005-06.
- Commentary on changes from 2004-05 include the change in
the net equity of the SUCH sector. However, discussions about
changes from budget and third quarter exclude the increase in
equity of the SUCH sector, as this information was not available.
- Overview. The Province recorded a surplus
of $8.7 billion primarily due to record non-renewable resource
revenue. Oil and natural gas prices and land lease sales reached
record levels in 2005-06.
Record energy revenue allowed the government to more aggressively
address infrastructure requirements, increase savings in the
Heritage Fund and other endowments, and provide a resource rebate
to Albertans.
- Revenue was $35.9 billion, $6.3 billion,
or 21.4 per cent, higher than in 2004-05 and $8.2 billion higher
than budgeted. The increases were primarily due to higher non-renewable
resource revenue, which reached $14.3 billion in 2005-06.
- Expense was $27.2 billion, $2.9 billion,
or 11.8 per cent, higher than in 2004-05, and was $1.2 billion
higher than budgeted. The increase from 2004-05 was primarily
due to higher municipal infrastructure support, health and education
spending, and natural gas rebates.
The increase from budget reflected higher natural gas rebates,
emergency and disaster assistance, and capital grants.
- Surplus. Revenue exceeded expense by $8.7
billion. This was $3.5 billion higher than in 2004-05 and was
$7 billion higher than budgeted.
- Fourth Quarter Results. The surplus was $1.2
billion higher than forecast in the 2005-06 Third Quarter
Fiscal Update due to higher revenue and lower-than-forecast
expense.
- Net Assets. At March 31, 2006, the Province
had net assets of $37.6 billion. This included $11.6 billion
in capital assets and $3.1 billion of equity in Crown-controlled
SUCH organizations.
Surplus
Allocation
The 2005-06
surplus, after taking into account required adjustments, was deposited
in the Alberta Sustainability Fund.
As assets
in the Sustainability Fund were already above the $2.5 billion
minimum target level, the cash from the surplus was available
for allocation to other balance sheet improvements.
$3.6 billion
was allocated to the Capital Account, $2.7 billion to savings
and $2.7 billion was retained in the Sustainability Fund.
Capital Account
– $3.6 billion.
- A net $3.6
billion was transferred to the Capital Account in 2005-06 to
help pay for capital projects in future years. Most of this
cash is expected to be drawn down over the next three to four
years to pay for planned capital commitments.
Savings –
$2.7 billion.
- $2.7 billion
was deposited in the Heritage Fund and other endowments, including
the new advanced education endowment.
- The book
value of the Heritage Fund and endowments reached $15.7 billion
at March 31, 2006.
Sustainability
Fund – $2.7 billion.
- Based on
final 2005-06 results, Sustainability Fund assets will be $2.7
billion higher than the minimum target level of $2.5 billion.
- At March
31, 2006, the Fund had assets of $4.1 billion. This was $1.6
billion higher than the minimum target. This did not include
cash available from higher-than-forecast fourth quarter results,
as this information was not available until after March 31.
Based on final fourth quarter results, an additional $1.1 billion
is being transferred into the Fund in 2006-07.
Economic
and Tax Highlights
Economic Highlights (calendar year basis)
- 2005 Economic Growth. Alberta’s economy
grew by an estimated 4.5 per cent in 2005, out-performing every
other province for the second consecutive year.
- 2006 Economic Outlook. Alberta’s strong
economic momentum is expected to continue in 2006, with growth
forecast at 4.8 per cent.
- Employment. In 2005, employment grew by
1.5 per cent, as 26,900 jobs were created. Alberta also had
the lowest unemployment rate among provinces, at 3.9 per cent.
- Personal Income. Alberta had the highest
personal disposable income per capita among provinces in 2005,
at $28,672. This was 19 per cent above the national average.
- Migration. For the ninth consecutive year,
Alberta attracted the highest net inter-provincial migration
in Canada.
- Energy Sector. High energy prices encouraged
strong exploration and development activity in Alberta’s
energy sector. Conventional drilling activity was up 22.6 per
cent in 2005, and non-conventional energy investment surged
by over $3.4 billion to an estimated $9.8 billion.
- Housing. The housing market remained strong
with starts reaching a 27-year high.
- Retail Sales. Large labour income gains (10
per cent) contributed to a robust consumer sector. Alberta led
all provinces in retail sales growth, with sales up 12 per cent,
almost double the Canadian average.
- Manufacturing Sector. The manufacturing sector
continued to build on the momentum begun in 2004. Shipments
increased by 12 per cent compared to 3 per cent nationally.
- Agriculture Sector. Alberta’s agriculture
sector experienced some improvement in 2005 with the opening
of the U.S. border to live cattle under the age of thirty months.
However, crop prices fell 20 per cent due to rising inventory
levels, reduced crop quality from poor harvesting weather and
a world oversupply of grain.
- Inflation. Alberta’s inflation rate
averaged 2.1 per cent in 2005. Energy prices contributed to
almost a third of the overall increase. Decreases in global
prices of various consumer goods, and the Canadian dollar appreciating
to a fourteen-year high, lowered the prices of imported goods,
keeping core inflation low at an average of 1.4 per cent.
Tax Highlights
- Lowest Overall Taxes. Albertans and Alberta
businesses paid the lowest overall provincial taxes in Canada.
Indexation of the personal tax system protected taxpayers from
paying higher taxes due to inflation.
- Resource Rebates. $1.3 billion was provided
to Albertans through the Alberta 2005 Resource Rebate
(a refundable tax credit).
- Alberta Family Employment Tax Credit. The
tax credit was enhanced, providing more benefits for working
families.
- Property Taxes. School property tax rates
fell by 5 per cent in 2005, marking the twelfth straight year
that rates have been reduced or frozen.
- Hotel Room Tax. The hotel room tax was reduced
from 5 per cent to 4 per cent and converted into a tourism levy.
Measuring Up – Performance Results
- Albertans had the highest average personal disposable income
per capita among the provinces.
- Alberta had the lowest total provincial and municipal tax
load among the provinces.
- Alberta’s three-year average growth rate (real GDP)
was 4 per cent, the highest among provinces.
- Alberta’s real labour productivity was the highest among
provinces, and well above the national average.
- 98 per cent of collective bargaining agreements were settled
without a legal work stoppage.
Total expense was $27.2 billion in 2005-06. The
health and education functions continued to account for over
60 per cent of total expense.
Year-over-Year Comparison. Expense
was 11.8 per cent, or $2.9 billion, higher than in 2004-05.
This included:
-
Base operating expense – $2.2 billion,
or 10.6 per cent increase, primarily related to health, education
and social services.
-
Capital grants – $646 million, or 32.1
per cent increase, due to higher municipal infrastructure
support.
-
Emergency/disaster assistance – Decrease
of $302 million. Higher flood assistance was offset by lower
Bovine Spongiform Encephalopathy (BSE) funding requirements
-
Natural gas rebates – Up $358 million
due to higher natural gas prices.
Budget-to-Actual Changes. Total
expense was $1.2 billion higher than budgeted. This was almost
entirely due to higher capital grants, natural gas rebates and
emergency/disaster assistance.
-
Capital grants – $552 million increase,
including health, post-secondary, school, housing and supportive
living, water/wastewater and community facilities capital
grants.
-
Natural gas rebates – $349 million
increase due to higher natural gas prices.
-
Emergency/disaster assistance – $270
million increase for floods, forest fire-fighting, and mountain
pine beetle infestations.
-
Other expense – $53 million net increase.
Increases in base operating expense and pension provisions
were partly offset by lower amortization and debt servicing
costs.
Third Quarter-to-Actual Changes.
Expense was down $249 million from the third quarter forecast.
Spending was lower than forecast in all major elements.
- The 2005-06 Capital Plan supported
$3.7 billion of capital projects in 2005-06. This was a $901
million, or 31.7 per cent increase from 2004-05, and $577 million
higher than budgeted.
- Approximately 80 per cent of the
increase from 2004-05 was due to higher municipal infrastructure
support. In particular, this reflected the first year of the
new five-year, $3 billion Municipal Infrastructure Program.
- The government announced major
commitments for health, post-secondary, schools and highway
capital projects during the year. Most of the increased funding
associated with these announcements will be provided in 2006-07
and future years.
- Alberta’s per capita spending
on infrastructure is approximately three times the average of
other provinces.
- The 2006-09 Capital Plan published
in Budget 2006 averages $4.4 billion a year.
-
Health expense was $9.7 billion. This was an increase of
7.2 per cent, or $653 million, from 2004-05, and $203 million
higher than budgeted.
-
The
increase from 2004-05 reflected higher funding
for health services, physician services, prescription drug
costs and information technology systems. Increases included:
-
$594
million, or 11.7 per cent, in base operating grants
for the health authorities.
-
$183 million, or 11.7 per cent, for physician services
-
$52 million, or 9.8 per cent, for non-group health benefits,
largely for the higher cost of drug benefits provided
to seniors.
-
These
increases were partly offset by lower health capital grants
in 2005-06.
-
The
increase from budget reflected additional
funding for access and wait time projects, electronic health
records, continuing care and capital grants for health facilities.
-
New projects designed to improve province-wide access to
health services and to reduce wait times were supported.
The early success of the Alberta Hip and Knee Replacement
Project demonstrated the value of developing innovative
models of patient care.
-
Alberta’s first Primary Care Network was launched
in May 2005. Fourteen Primary Care Networks now operate
in seven health regions providing services to more than
700,000 patients.
-
$188
million increase in spending on health information systems,
such as the Alberta Netcare Electronic Health Record. This
included capital grants of $116 million.
-
Continuing
care was improved by increasing the number of nursing and
personal care hours per resident in long-term care facilities
from 3.1 to 3.4 per day, increasing support for patient
lift equipment, implementing assessment systems, and reviewing
medication use.
-
$200
million was added to the Medical Research Endowment Fund
in 2005-06, with a commitment to add a further $300 million
in the following two years.
-
$25
million for mental health innovation.
-
Support
of $631 million was provided for health facilities and equipment
(including $11 million of capital investment).
-
This
was a decrease of $232 million from 2004-05, as several
major health projects were substantially completed in 2004-05.
-
2005-06
capital funding included:
-
Continued work on the Edmonton Clinic (Health Services
Ambulatory Learning Centre), Alberta Children’s
Hospital in Calgary and the Mazankowski Alberta Heart
Institute in Edmonton, and redevelopment of the Royal
Alexandra Hospital in Edmonton and the Rimbey Hospital
and Care Centre.
-
$65
million of in-year support for capital facilities, such
as redevelopment of the Foothills, Rockyview and Peter
Lougheed Hospitals in Calgary and support for new health
facilities in Sherwood Park and Fort Saskatchewan. This
funding represented the first year of the announced
$1.4 billion in increased support for health facilities.
Measuring
Up – Performance Results
-
65
per cent of Albertans surveyed rated the overall health
system as “excellent” or “good.”
-
78 per cent of Albertans surveyed rated their access to
physician services as “easy” or “very
easy.”
-
67
per cent of Albertans surveyed rated their access to hospital
services as “easy” or “very easy.”
-
88 per cent of Albertans suveyed aged 18 to 64 rated their
own personal health as either “excellent,” “very
good,” or “good.”
-
86 per cent of Albertans surveyed aged 65 and older rated
their own personal health as either “excellent,”
“very good,” or “good.”
EDUCATION
-
Education expense was $6.9 billion in 2005-06. This was
an increase of 8.4 per cent, or $533 million, from 2004-05,
and $149 million higher than budgeted.
-
The
increase from 2004-05 primarily reflected
higher basic and post-secondary operating grants.
-
This
increase from budget was due to higher
capital grants for post-secondary institutions and increased
funding to school boards for school operations and maintenance,
increased transportation fuel costs and capital grants.
Major
Initiatives
Basic Education
-
Small
Class Size Initiative. Funding was increased to hire 435
new teachers in the 2005-06 school year to reduce class
sizes and retain the 1,250 teachers hired in the previous
year.
-
Alberta
Initiative for School Improvement. Additional support was
provided for local initiatives designed to improve student
learning and performance.
-
Student
Health Initiative. Integrated health and related support
was provided for children with special health needs.
-
Technology.
Supported expanded technology in the classroom, such as
video-conferencing suites and funding for connecting computers
in schools to the Alberta SuperNet.
-
Support
for post-secondary institutions was increased by 13.9 per
cent. This included a 6 per cent increase in operating grants
to post-secondary institutions, start-up funding for the
new Faculty of Veterinary Medicine at the University of
Calgary and degree programs at Grant MacEwan College, funding
for the Lois Hole Digital Library, increased facility operation
grants for newly finished buildings, and other increased
support to institutions.
-
Access to the Future Act. Legislation was passed
to establish an advanced education endowment as part of
the Heritage Savings Trust Fund. The endowment is targeted
to grow over time to $3 billion. An initial allocation of
$750 million was made in 2005-06.
-
Tuition. The government paid tuition increases at public
post-secondary institutions. A comprehensive review of affordability
of advanced education was initiated with one outcome to
be a new tuition policy.
-
Student
Assistance. Funding for scholarships, bursaries and grants
to students were increased by 7.7 per cent, with scholarships
distributed to 28,960 students. $250 million was added to
the Alberta Heritage Scholarship Fund. The Alberta Centennial
Education Savings Plan was established to encourage parents
to save for their children’s education.
-
Apprenticeship
Training. 2,382 new apprenticeship technical training seats
were added in 2005-06.
-
$434
million was provided for education capital projects, a decrease
of 4.1 per cent or $19 million from 2004-05. Funding included
$243 million for school projects and $191 million for post-secondary
institutions.
-
Schools
– Five new schools and seven replacement schools were
opened during 2005-06. Additional funding was provided for
new modular classrooms, the leasing of portables and the
relocation of existing portables.
-
Post-secondary
facilities – Expansion and upgrades included facilities
at Grant MacEwan College, NAIT, the University of Alberta,
the University of Calgary, Olds College, Banff Centre and
the University of Lethbridge.
Measuring
Up – Performance Results
-
78
per cent of Alberta’s grade 9 students met acceptable
standards on the Provincial Achievement Tests in language
arts.
-
91
per cent of Albertans surveyed aged 25-34 completed high
school.
-
79
per cent of adult Albertans surveyed were satisfied that
most adult Albertans were able to access the education or
training they want.
-
90 per cent of employers surveyed were satisfied with recent
graduates’ skills and quality of work.
-
87
per cent of Albertans aged 25-34 with a post-secondary diploma
or certificate were employed
-
76
per cent of Aboriginal Albertans (off-reserve) surveyed
aged 25-34 completed high school.
-
95
per cent of schools and 90 per cent of post-secondary institutions
were estimated to be in acceptable (“fair” or
“good”) physical condition.
-
Social Services expense was $2.7 billion in 2005-06. This
was an increase of 10.7 per cent, or $263 million, from
2004-05, and $37 million higher than budgeted.
-
The
increase from 2004-05 reflected increases
of 23 per cent for AISH, 27 per cent for seniors benefits
and 7.6 per cent for children’s services.
-
The
initial response to the Achieving Excellence in Continuing
Care report included:
-
increasing
benefits for low-income Albertans in supportive living
and long-term care;
-
enhancing
grants for those seniors lodges which provide a high
level of support for residents;
-
implementing
new continuing care accommodation standards;
-
introducing
updated monitoring, reporting and enforcement processes;
and
-
developing
a new concerns resolution process for continuing care
residents and their families.
-
Benefits
for clients receiving AISH were enhanced and new benefits
introduced. This included increased earnings exemptions,
and benefits for extra needs such as caring for a guide
animal, special diets or emergency travel.
-
7.1 per cent increase in financial assistance to Persons
with Developmental Disabilities boards.
-
Funding
was provided for three pilot projects aimed at continuing
support for adults with Fetal Alcohol Spectrum Disorder.
-
The
Ministry of Children’s Services provided additional
funding for early learning and child care, support for families
with disabled children and child intervention services.
Measuring
Up – Performance Results
-
Survey
results indicate that 83.8 per cent of Alberta children
aged 2-5 demonstrated healthy emotional development and
85.9 per cent aged 0-3 demonstrated healthy social development.
-
Survey
results indicate that 94.3 per cent of Alberta children,
aged 0-5, had parents who interacted positively with them.
AGRICULTURE,
RESOURCE MANAGEMENT AND ECONOMIC DEVELOPMENT
-
Agriculture, Resource Management and Economic Development
expense was $1.8 billion in 2005-06. This was a decrease
of 6.6 per cent, or $128 million, from 2004-05, and $18
million lower than budgeted.
-
Lower
expense from the previous year and from budget was due to
lower agriculture assistance for BSE.
-
Agriculture.
BSE agriculture assistance was $386 million lower than
in 2004-05. The reopening of the U.S. border to live beef
exports for cattle under 30 months of age allowed the
Fed Cattle Set-Aside program to be discontinued earlier
than anticipated in the budget.
Partly
offsetting lower BSE assistance were increases related
to the Canadian Agriculture Income Stabilization program
and other agriculture programs.
-
Tourism.
Effective April 1, 2005, the 5 per cent hotel room tax was
converted to a 4 per cent tourism levy, and the annual level
of provincial support for tourism marketing and development
was determined by the amount of revenue the hotel room tax/tourism
levy raised in previous years. In 2005-06, based on this
new policy, tourism funding increased by nearly 75 per cent.
-
Research.
$100 million was added to the Science and Engineering Research
Endowment Fund.
-
Alberta
Energy Innovation Strategy. A five-year, $200 million Innovative
Energy Technologies program was established to encourage
the development of innovative technologies to enhance oil
and gas recovery.
-
Mountain
Pine Beetles. Over 14,000 trees infested with mountain pine
beetles were cut down to protect Alberta’s forests.
Measuring
Up – Performance Results
-
Sponsored research at Alberta universities increased by
11.4 per cent in the past year, and has almost doubled since
2000.
-
Tourism
industry revenue continues to increase.
-
Total
goods exported grew by 18.5 per cent to an estimated $79.2
billion in 2005.
TRANSPORTATION, COMMUNICATIONS AND UTILITIES
-
Expense
was $2.3 billion in 2005-06, an increase of 90.1 per cent,
or $1.1 billion, from 2004-05, and $440 million from budget.
-
The increase from 2004-05 reflected a $722
million increase in municipal infrastructure support and
a $358 million increase in natural gas rebates.
-
The
increase from budget reflected higher-than-budgeted
natural gas rebates due to stronger-than-expected natural
gas prices.
-
A new five-year, $3 billion Municipal Infrastructure Program
was introduced.
-
Funding
was committed to accelerate construction projects in the
Fort McMurray area and other resource development areas,
including major highway work to twin Highway 63 and upgrade
Highway 881.
-
Part
of the Southwest leg of Anthony Henday Drive in Edmonton
opened to traffic a year ahead of schedule. The Southeast
leg, which is Alberta’s first highway project using
a public-private partnership, commenced construction in
2005-06.
-
The Traffic Safety Amendment Act improved road
safety, including doubling existing fines for drivers caught
speeding past emergency and construction workers.
-
Natural
Gas Rebates. $634 million was provided to help offset winter
heating costs.
-
$1.1
billion in municipal infrastructure grants, an increase
of $722 million from 2004-05.
-
$769 million for the provincial highway network, an increase
of $199 million from 2004-05 (includes $644 million in capital
investment).
Measuring
Up – Performance Results
-
87.1
per cent of provincial highways were in acceptable (“fair”
or “good”) physical condition.
-
99.1
per cent of water management infrastructure was in acceptable
(“fair” or “good”) physical condition.
PROTECTION
OF PERSONS AND PROPERTY
-
Protection
of Persons and Property expense was $1.2 billion in 2005-06.
This was an increase of 21.8 per cent, or $209 million,
from 2004-05, and $257 million from budget.
-
The
increase from 2004-05 reflected higher flood disaster
assistance and increased funding for policing and justice
programs
-
The
increase from budget reflected disaster assistance
for floods and wildfires.
-
12
per cent increase in the budgets of the Ministries of Justice
and Solicitor General and Public Security. Increase allowed:
-
Addition
of nearly 200 police officers to Alberta communities
in 2005-06.
-
Enhancements
to policing grants to help ease the financial burden
on smaller towns and cities.
-
Establishment
of the Integrated Child Exploitation Unit to combat
on-line child sexual exploitation.
-
One-window
system to assist families accessing the family court
system and to allow for improved access to the courts
by reducing wait times and increasing the availability
of mediation and dispute resolution services.
-
Enhancements to programs dedicated to identifying and
dismantling crime networks across the Province.
-
Implementation
of courthouse security and courtroom videoconferencing
to increase the safety of the general public and those
involved in court operations.
-
Flood
Assistance. $173 million was provided to residents, business
owners and municipalities, and for restoration of provincial
parks and other government infrastructure, because of extensive
flooding, primarily in southern Alberta.
-
$153
million was provided to protect Albertans and their property
from wildfires and support programs that prevent wildfires
in Alberta’s forests.
Measuring
Up – Performance Results
-
Violent
and property crime rates decreased, remaining the lowest
among the four western provinces.
-
86.7
per cent of Albertans surveyed felt human rights in Alberta
were “very well” or “fairly well protected.”
-
60 per cent of Albertans felt that crime is not a serious
problem in their neighborhood.
-
Alberta’s
workplace lost-time claim rate continued to decline.
-
Other program expense was $2.1 billion in 2005-06. This
was an increase of 13.9 per cent, or $258 million, from
2004-05, and $140 million higher than budgeted. Increases
primarily reflected additional funding for housing assistance
and centennial projects.
-
Alberta’s
Centennial – The government provided $107 million
to commemorate Alberta’s centennial and leave a lasting
legacy for Albertans. Funding supported initiatives such
as the September 1, 2005 centennial celebrations, Alberta
Tracks: A Centennial Music Celebration, renewal of the Jubilee
Auditoria and the construction of community facilities across
the province. This brings the total commitment for Alberta’s
centennial to $517 million.
-
Housing
– In 2005-06, $116 million was provided to support
the development of affordable housing and supportive living
units, and upgrading of lodges in rural Alberta. These initiatives
help address housing needs of seniors by providing an alternative
to long-term care facilities.
-
Environment
– Implemented Canada’s first greenhouse gas
reporting program for large emitters.
-
Parks
– Operating and capital support was increased to enhance
Alberta’s park infrastructure and facilities, including
Canmore Nordic Centre.
-
Alberta
SuperNet – Construction of the SuperNet was completed
in September 2005, linking government, health, library and
education facilities in 429 communities across the Province.
The network is now operational, enabling high speed Internet
access and network services through Internet service providers.
Measuring
Up – Performance Results
-
91.1
per cent of visitors surveyed were satisfied with experiences
at provincial parks and recreation areas.
-
88.8
per cent of adult Albertans surveyed participated in arts
and cultural activities.
-
98.5 per cent of visitors were satisfied with their experiences
at provincial historic sites, museums, and interpretive
centres.
-
River
water and air quality remained high.
-
Debt
servicing costs represent the interest paid on unmatured
accumulated debt and interest costs related to Agriculture
Financial Services Corporation’s lending operations.
-
Debt
servicing costs were $248 million in 2005-06. This was a
decrease of $54 million from 2004-05 and $43 million lower
than estimated in the budget. Decreases were primarily due
to lower debt and lower in-year financing requirements.
-
Sufficient
funds were set aside in 2004-05 in the Debt Retirement Account
to repay the remaining $2.2 billion of accumulated debt
as it matures.
-
Pension
obligations in respect of public sector pension plans increased
by $200 million to $5.4 billion in 2005-06.
-
$161
million of the increase was related to the Teachers’
Pension Plans. The Province’s obligations for these
plans increased to $4.4 billion.
-
For purposes of the Fiscal Responsibility Act,
the annual change in pension obligations is excluded from
expense and balanced budget requirements. Pension obligations
are scheduled to be eliminated under a separate legislated
plan.
-
Total revenue was $35.9 billion, $6.3 billion,
or 21.4 per cent higher than in 2004-05. Revenue was $8.2
billion higher than budgeted (excluding increase in equity
of SUCH sector).
-
2005-06 revenue is net of the $1.3 billion
cost of the Alberta 2005 Resource Rebate, which
was recorded as a deduction from personal income tax revenue.
-
The increase in 2005-06 revenue was primarily
due to higher non-renewable resource revenue.
-
Revenue was $941 million higher than forecast
in the Third Quarter Fiscal Update. The increase
was primarily due to higher corporate and personal income
tax revenue and higher investment income.
NON-RENEWABLE RESOURCE REVENUE
-
Non-renewable resource revenue reached a
record $14.3 billion in 2005-06. This was $4.6 billion higher
than in 2004-05 and $6.7 billion higher than budgeted.
-
Energy prices were significantly higher than
the budget estimate or what was expected by energy analysts.
High prices resulted in record oil and natural gas royalties
and record revenue from bonuses and sales of Crown leases.
-
Natural gas prices averaged Cdn$8.29 per
gigajoule, $2.24 higher than in 2004-05 and $2.69 higher than
budgeted.
-
Oil prices averaged US$59.94 per barrel.
This was $14.91 higher than in 2004-05 and $17.94 higher than
the budget estimate.
-
Bonuses and sales of Crown leases reached
a record $3.5 billion, over $2.2 billion higher than the previous
record in 2004-05.
-
Partly offsetting the impact of higher energy
prices was the strengthening of the Canadian dollar relative
to the United States dollar. '
-
Non-renewable resource revenue in 2005-06
was nearly double the level it was just two years earlier
in 2003-04, and nearly five times higher than it was through
most of the 1990s.
TAX REVENUE
-
Tax revenue was $10.9 billion net of the
Alberta 2005 Resource Rebate. This was an increase
of $689 million, or 6.8 per cent, from 2004-05, and $191
million higher than budgeted.
-
Excluding the $1.3 billion Alberta
2005 Resource Rebate, tax revenue was $2 billion,
or 20 per cent, higher than in 2004-05, and $1.5 billion
higher than budgeted.
-
The resource rebate provided a $400 per
person refundable tax credit to all Albertans.
-
Personal income tax revenue
was $6.0 billion, excluding the Alberta 2005 Resource
Rebate. This was $1.4 billion higher than in 2004-05
and $801 million higher than budgeted. The increase reflects
both strong income growth and significant adjustments
made to both 2004-05 and 2005-06 revenue to address under
and over estimation of previous years’ tax revenue.
The base increase in personal income tax revenue in 2005-06,
before taking into account adjustments for prior years,
was 9.8 per cent.
-
Corporate income tax revenue
was $2.9 billion. This was $553 million higher than in
2004-05 and $639 million higher than budgeted. The increases
were primarily due to high energy prices and strong corporate
profits.
-
Other tax revenue was
$3.3 billion. This was $108 million higher than in 2004-05
and $74 million higher than the budget estimate. The increase
from 2004-05 was mostly attributable to school property
tax, freehold mineral rights tax and fuel taxes.
GOVERNMENT OF CANADA TRANSFERS
-
Transfers from Government of Canada were
$3.4 billion, $173 million higher than in 2004-05 but $109
million lower than budgeted.
-
The increase from 2004-05 was primarily due
to higher transfers for flood disaster assistance, health,
and early learning and child care. Partly offsetting these
increases were lower agriculture transfers.
-
The decrease from budget reflected lower
health and social transfers due to the impact of higher provincial
income tax revenue and the reporting of some of the Wait Times
Reduction Fund to 2004-05.
INVESTMENT INCOME
-
Investment income was $2.3 billion. This was an increase
of $539 million from 2004-05 and $972 million higher than
budgeted. The increases reflected strong equity markets
and larger fund balances in investment accounts.
INCREASE IN EQUITY OF SUCH SECTOR
-
Increase in equity attributed to Crown-controlled
SUCH sector organizations was $345 million. This was $106
million higher than in 2004-05.
-
$278 million of the increase in equity is
attributable to post-secondary institutions and $66 million
to health authorities.
OTHER REVENUE
-
Revenue from other sources was $4.6 billion,
$210 million higher than in 2004-05 and $475 million higher
than the budget estimate.
-
The increases reflected higher gaming and
lottery revenue.
-
As set out in the Fiscal Responsibility
Act, the Sustainability Fund receives non-renewable
resource revenue above the level available for budget purposes
($4.75 billion in 2005-06) and any additional year-end surpluses,
less required adjustments.
-
Withdrawals are allowed to offset the cost
of emergencies/disasters, natural gas rebates, First Nations
settlements and revenue shortfalls. In 2005-06, $1 billion
was withdrawn to pay for emergencies/disasters and natural
gas rebates. In addition, the $1.3 billion cost of the Alberta
2005 Resource Rebate was charged against the Fund.
-
Adjustments. The net cash transferred to
the Fund was also adjusted for:
-
Retained income of funds and agencies
– $522 million was retained by funds and agencies,
primarily Alberta Treasury Branches and the Agriculture
Financial Services Corporation.
-
Increase in equity of SUCH sector –
SUCH sector organizations retained the $345 million
increase in their equity.
-
Capital Requirements – $2.3 billion.
The Fiscal Responsibility Act allows current-year
capital requirements to be met by allocating non-renewable
resource revenue to the Capital Account above the $4.75
billion limit.
-
Other Cash Adjustments – This
primarily reflects the difference between cash and accrued
revenue and expenditure and was negative $300 million
in 2005-06.
-
Assets Available for Allocation.
When the assets of the Fund exceed $2.5 billion, they can
be allocated to other balance sheet improvements. In 2005-06,
a total of $2.7 billion was allocated to savings and $3.6
billion to the Capital Account for the future cost of current
capital commitments.
After these allocations, the Sustainability Fund had assets
of $4.1 billion at March 31, 2006. In addition, $1.1 billion
will be transferred to the Fund after March 31 from the
better-than-forecast fourth quarter results.
-
In total, based on 2005-06 final results,
the Fund assets will be $5.2 billion. This is $2.7 billion
higher than the minimum target level of $2.5 billion.
Net
Financial and Capital Assets
At March 31, 2006, the assets of the Government of Alberta
exceeded its liabilities by $37.6 billion. This included
$11.6 billion in capital assets and $3.1 billion in equity
in Crown-controlled SUCH sector organizations.
FINANCIAL ASSETS
-
$44.9 billion in financial assets as
of March 31, 2006. This included:
-
Heritage Fund – $13.4 billion
(book value). Includes the advanced education endowment.
-
Endowment Funds – $2.3 billion.
-
Sustainability Fund – $4.1 billion
plus $1.1 billion to be transferred from Other Financial
Assets (cash).
-
Capital Account – $4.2 billion.
These funds are to be used to meet the cost of current
capital commitments in future years.
- Debt Retirement Account – $2.2 billion. Set aside to
repay the Province’s remaining accumulated debt as it
matures. These funds are locked-in and can only be used to repay
accumulated debt.
- Self-supporting Lending Organizations – $6.6 billion.
Financial assets of Alberta Capital Finance Authority and Agriculture
Financial Services Corporation (AFSC). These assets offset the
liabilities of the lending organizations.
- Equity in Commercial Enterprises – $1.8 billion. Primarily
equity in Alberta Treasury Branches.
- Equity in Crown-controlled SUCH sector organizations –
$3.1 billion. Post-secondary institutions account for $2.4 billion,
school boards $380 million and health authorities $356 million.
- Other Financial Assets – $7.1 billion. Of this amount
$1.1 billion is to be transferred to the Sustainability Fund.
Of the remaining $6 billion, accounts and interest receivable
represent $3.8 billion. This includes receivables from oil and
natural gas royalties, federal government and taxes.
LIABILITIES
- The provincial government had $18.9 billion in liabilities
as of March 31, 2006. This included:
- Pension Obligations – $5.4 billion. Of this amount
$4.4 billion was related to the Teachers’ Pension
Plans.
- Self-Supporting Lending Organizations – $5.3 billion.
In addition, $882 million of General Revenue Fund (GRF)
debt on-lent to AFSC is recorded under Other Liabilities.
The financial assets of the Alberta Capital Finance Authority
and AFSC offset these liabilities.
- Accumulated Debt – $2.2 billion. The financial assets
of the Debt Retirement Account fully offset this debt.
- Accounts and Interest Payable and Other Liabilities –
$6.0 billion. Includes GRF debt on-lent to AFSC, natural gas
royalty and security deposits, payables to the Government of
Canada, unearned revenue and trade payables and liabilities.
There is an offsetting relationship between some of these liabilities
and Other Financial Assets.
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