Edmonton... Strong energy prices are fueling a robust Alberta economy and boosting government revenues, now forecast at $28.8 billion. Of Alberta's forecast $4.3 billion surplus, $3.7 billion will be used to pay off the remaining accumulated debt as it comes due.

"Alberta's solid fiscal and economic position allows us to put the accumulated debt behind us and turn to the opportunities of the next Alberta with confidence," Finance Minister Shirley McClellan said.

Higher than expected oil and natural gas prices have pushed the resource revenue forecast to
$9.6 billion, up $4.8 billion from budget. Increased investment income has also contributed to the total revenue forecast being $5.8 billion higher than budgeted.

Total expense is $1.8 billion higher than budgeted. The bulk of this increase is providing $820 million in disaster and emergency assistance for BSE, including prion research; forest fire fighting costs; flood assistance; and $314 million for natural gas rebates from the Sustainability Fund. Increased transfers from the Capital Account are funding an additional $468 million in capital grants, primarily for health capital.

Total expense is down $83 million from second quarter, primarily due to revised forecasts for flood disaster assistance, natural gas rebates, and debt-servicing costs. Reduced program spending, notably lower crop insurance payments after a better than expected harvest, has offset increased funding to support services to children and families, income supports programs, education, and capital grants for major fairs.

Total revenue is up $115 million from second quarter, as higher investment income and other increases are partly offset by lower federal transfers. A slightly higher oil price forecast and higher revenue from land sales in the second quarter have been offset by lower natural gas prices.

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Attachments: Backgrounder on Alberta Sustainability Fund; Third Quarter Fiscal Update and Third Quarter Activity Report which outlines some of the government's activities in support of its core business of People, Prosperity, and Preservation. A separate news release addresses the Third Quarter Report of the Heritage Savings Trust Fund.
(Editor's note: Electronic versions are on the Alberta Finance web site at www.finance.gov.ab.ca

Tracy Balash
A/Director of Communications
Alberta Finance
(780) 427-5364

This news release is available on the Alberta Finance homepage at: http://www.finance.gov.ab.ca

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Tracy Balash
A/Director of Communications
Alberta Finance
(780) 427-5364

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