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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]

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]

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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