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November 16, 2006
A growing economy is strengthening Alberta’s financial outlook, allowing for increased investment in capital projects.
An additional $930 million has been committed to the province’s Capital Plan, in addition to the $1.76 billion increase announced in the First Quarter Fiscal Update. This brings the total increase in capital funding to $2.7 billion, with $895 million to be used this fiscal year.
The additional spending includes support for:
- post-secondary facilities
- schools
- roads
- housing
- public transit
- community-related facilities
- Water for Life projects
More information: Capital Plan update
Other highlights of the Second Quarter Fiscal Update include a surplus forecast of $5.4 billion, an increase of $1.3 billion from budget, mostly due to higher income tax revenue.
Personal income growth and updated assessment data have increased the personal income tax revenue forecast by $1.4 billion. Stronger corporate profits have increased the corporate income tax forecast by $573 million.
Resource revenue is almost unchanged from the budget. While oil prices have remained strong, natural gas prices have softened. Resource revenue is now forecast to be only $197 million higher than budget.
Expense is forecast to be $29.7 billion, a $1.4 billion increase from budget, mainly due to the increase in capital grants and emergency/disaster assistance for:
- agriculture
- floods
- fires
- mountain pine beetles
More than $2.5 billion of the surplus has been allocated to savings, endowments and other funds, including:
- $1.3 billion to the Heritage Fund (including inflation-proofing)
- $250 million to the advanced education endowment (in the Heritage Fund)
- $500 million to the Alberta Cancer Prevention Legacy Fund
- $200 million to the Energy Innovation Fund
The rest of the surplus will go to the Capital Account and the Sustainability Fund.
Heritage Fund update
Investment income for the Alberta Heritage Savings Trust Fund is expected to be $1.1 billion, an increase of $243 million from the budget estimate.
After a $1 billion deposit, $283 million for inflation-proofing and $250 million for the advanced education endowment, the book value of the Heritage Fund is forecast to be $15 billion at the end of the fiscal year, a $1.6 billion increase from March 31, 2006.
Fiscal summary (millions of dollars)
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Budget 2006-07 |
2nd Quarter Forecast |
Change from Budget |
| Revenue |
$32,408 |
$35,137 |
$2,729 |
| Non-Renewable Resource Revenue |
$11,354 |
$11,551 |
$197 |
| Expense |
$28,312 |
$29,698 |
$1,386 |
| Surplus (Net Revenue) |
$4,096 |
$5,439 |
$1,343 |
| Sustainability Fund |
$4,408 |
$5,506 |
$1,098 |
| Oil Price (WTI US$/bbl) |
$50.00 |
$64.67 |
$14.67 |
| Natural Gas Price (Cdn$/GJ) |
$7.50 |
$5.75 |
-$1.75 |
More information
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