Newsrelease - Alberta Finance - Government Annual Report shows finances remain on track despite year of volatility

News Release

June 25, 2002

Government Annual Report shows finances remain on track despite year of volatility

Minister of Finance Patricia Nelson
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Edmonton... The 2001-02 Government of Alberta Annual Report shows the province’s bottom line is solid - despite a year of economic uncertainty and extreme revenue volatility.

“2001 - 2002 was a challenging year for the Alberta government. We dealt with falling and volatile revenues, higher than expected expenditures for forest fires and agriculture assistance, a drop in investment income and a mid-year adjustment,” said Minister of Finance Patricia Nelson.

“The economy showed signs of slowing down early in the year, but I don’t think anyone could have anticipated the global economic slowdown in the fall of 2001. The fiscal adjustments government made in October of last year helped maintain the province’s fiscal position. That, combined with a strong fourth quarter, enabled the government to achieve an economic cushion close to that forecast in Budget 2001.”

The report shows overall government revenue was $646 million lower than budgeted, mainly due to lower energy prices and reduced investment income. Total government spending was down approximately $600 million from budget. The year-end economic cushion was $772 million compared to the budget estimate of $817 million.

In accordance with the Fiscal Responsibility Act, the year-end economic cushion will be applied against the provincial debt. Accumulated debt, less cash set aside for future debt repayment, will be reduced from the third quarter forecast of $6.0 billion to $5.3 billion. As a result of this accelerated debt reduction, Alberta will save approximately $1.2 billion in annual debt servicing costs, money which can be directed toward priority areas in future years.

“Our commitment to Albertans is to keep the province within a fiscal framework of balancing the budget, eliminating the debt and funding priority areas. The Annual Report shows we’re honouring that commitment,” said Nelson.

Report highlights:

Alberta had the highest personal disposable income per capita among provinces in 2001
The single rate tax plan saved Albertans $1.1 billion on personal income tax
Business taxes were reduced by $286 million
Alberta’s economy grew by an estimated 4.5%, the highest growth among provinces
Over $3 billion was provided for health and education facilities, transportation and other infrastructure projects to meet the needs of Alberta’s growing population and economy

The Government of Alberta Annual Report includes results from the provincial government’s Measuring Up report. Measuring Up tracks progress on each of the government’s goals relating to people, prosperity and preservation.

Attachments: Charts and graphs, Highlights.

For highlights of the Government of Alberta Annual Report 2001-02, click here.
For the full Government of Alberta Annual Report 2001-02, click here.
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Attachments

For media enquiries, please contact:

Jerry Bellikka
Alberta Finance Communications
(780) 427-5364 or cell (780) 718-5699
Dial 310-0000 for toll free access outside of Edmonton.