Newsrelease

June 26, 1997
Edmonton, Alberta

" This is a good day for Albertans. We’re not only at the forefront of economic growth in Canada, we’ve also made a $2.5 billion payment on the net debt. With this payment, we saved $201 million in interest costs in 1996-97. Our fiscal plan is working, steadily bringing us out from under yesterday’s bills."

- Stockwell Day, Provincial Treasurer

Alberta On Track to Zero Net Debt by 2005

Provincial Treasurer Stockwell Day released today the 1996-97 financial and performance results for Alberta. For the third year in a row, the province has recorded a surplus, making a $2.5 billion payment on the net debt.

This payment brings Alberta’s net debt down to $3.7 billion, not including pension obligations. Now Alberta’s net debt is less than half what it was in 1993-94 and on track to be eliminated four years ahead of the legislated deadline of March 31, 2010.

Previous surpluses -- $958 million in 1994-95, $1.132 billion in 1995-96 -- also went directly to the net debt.

Alberta’s robust economy helped contribute to the strong financial performance. The higher-than-expected surplus was due primarily to strong resource and income tax revenues. Better-than-expected progress toward eliminating pension obligations contributed a further $371 million to the bottom line.

Other highlights of the financial results include:

• Revenues rebounded from 1995-96. Total revenues for the year were $16.7 billion, up almost seven per cent (over a billion dollars) from the previous year and more than $1.9 billion higher than the budget forecast. The $545 million revenue cushion set aside in the Budget is also applied against the net debt.
• Spending remained on target. Total spending for 1996-97, excluding pension provisions, was $14.2 billion, down $224 million from the previous year and $46 million lower than estimated in the budget. Debt servicing costs dropped by almost 14 per cent, saving Albertans $201 million on interest payments compared to 1995-96.
• Nearly three-quarters of total program spending went to Albertans’ top priorities: health, education and social services. The biggest increase in spending was in health - 5.4 per cent or $204 million over 1995-96.
• Pension obligations declined by $371 million, bringing total government spending down $737 million from the budget estimate. The budget estimates had forecast an increase in pension obligations of $320 million. The substantial change is due to a combination of factors including government cost control and restructuring and better-than-expected investment performance.

"1996-97 was another strong year for Alberta," said Stockwell Day. "The budget was balanced as promised, spending remained under control with reinvestments in key areas, and windfall revenues going to pay down Alberta’s net debt."

Alberta’s original net debt retirement schedule had a target date of 2022 and is now revised to 2005-06. Pension obligations are being eliminated through a longer-term legislated plan.

Financial Highlights for 1996-97

• A payment of over $2.5 billion has been made on Alberta’s net debt subject to the Balanced Budget and Debt Retirement Act. As required by law, every dollar of the 1996-97 surplus went to pay down Alberta’s net debt.
• Alberta’s net debt continues to drop. With this year’s payment, net debt now stands at $3.7 billion, not including pension obligations. That’s a drop of more than half in three years.
• Revenues rebounded from last year. Total revenues for the year were almost $16.7 billion, up over a billion dollars from last year and more than $2.4 billion higher than the budget estimate.
• Spending remains on target. Total spending for 1996-97, excluding pension provisions, was $14.162 billion, down $224 million from last year and $46 million lower than the budget.
• Albertans saved $201 million in debt servicing costs in 1996-97.

Note: After viewing any table, press your "back" button to return to the document.

Click here for graphic - "Net Debt Retirement Schedule"

Click here for graphic - "Fiscal Summary"

Click here for graphic - "Net Debt and Your Share of Net Debt"

Click here for graphic - "Consolidated Surplus (Deficit)"

Click here for graphic - "Resource Revenue"

Click here for graphic - "Total Spending"

For further information, please contact:

Trish Filevich
Director of Communications
Alberta Treasury
(780) 427-5364
webmaster@treas.gov.ab.ca

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