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November 26, 2003 Debt paid
down, Capital Account boosted with Sustainability Fund Surplus Edmonton… Additional money in the Sustainability Fund will be used to pay down Alberta’s debt and boost the Capital Account if revenues stay strong through to March 31, 2004. Finance Minister Patricia Nelson made the announcement in releasing the Second Quarter fiscal update for 2003-04. “I’m pleased that we may be in a position at the end of this fiscal year to put more money towards these priority areas,” said Nelson. “Forecast revenues would see the Sustainability Fund surpass its $2.5 billion target, which means we could set $428 million aside to further pay down Alberta’s debt and also set $428 million aside to help pay for needed infrastructure.” Alberta’s accumulated debt, less cash set aside for future repayment, is now forecast to be $4.2 billion. “I’m also pleased that we can move quickly to respond to the immediate funding priorities identified by the Commission on Learning and to address cost pressures being felt in other program areas,” said Nelson. The government approved $62 million from the contingency allowance in second quarter for various Ministry initiatives including increased funding for Alberta school boards, and to address caseload and cost increases in social assistance and training programs. The potential allocations to the Capital Account and debt repayment are possible despite more than $900 million being paid out in disaster assistance. The government provided $794 million in assistance related to the BSE crisis, partly offset by $407 million in increased agriculture transfers from the federal government. The province also provided $113 million to fight forest fires. The money for disaster assistance was withdrawn from the Sustainability Fund. “The Sustainability Fund is functioning exactly the way it’s supposed to,” said Nelson. “Disaster assistance is one potential scenario in which money can be taken from the Sustainability Fund instead of disrupting ministry budgets to pay for disasters and emergencies.” Total expense is $1.12 billion higher than budgeted, primarily due to disaster funding and potential natural gas rebates. If the trigger price for natural gas rebates is not reached, the money will remain in the Sustainability fund. Total revenue is $2.15 billion higher than estimated in the budget due primarily to stronger than forecast non-renewable resource revenues. Resource revenue is forecast to be $6.7 billion, $1.9 billion higher than the budget estimate. Natural gas prices are forecast to be Cdn$5.15 per thousand cubic feet (mcf) for this fiscal year. That’s $1.10 higher than budget. The oil price is expected to average US$27.50 per barrel, US$4.20 higher than budget. Under the new fiscal framework, non-renewable resource revenue in excess of $3.5 billion will be transferred to the Sustainability Fund. The Sustainability Fund is forecast to be $2.5 billion by the end of the fiscal year, after allocations to the debt retirement account, Capital Account, and withdrawals for emergency assistance and potential natural gas rebates.
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