An unprecedented reversal of fortunes has left Alberta with a $3.9-billion surplus from the previous fiscal year.
Alberta pulled in 56 per cent more revenue during the 2021-22 year than initially forecasted, the government said Tuesday in its latest fiscal update.
Skyrocketing oil and gas prices sent a record $16.2 billion in non-renewable resource revenues into provincial coffers.
“The year-end fiscal report is fantastic news for Albertans and our province — and an opportunity to save resource revenue for future generations and avoid past mistakes that led to today’s debt burden,” Finance Minister Jason Nixon said in a news release.
In spring 2021, the province was staring down an anticipated $18.2-billion deficit for the year ahead.
Economists predicted the average West Texas Intermediate benchmark oil price would be $46 US per barrel. But oil prices exceeded expectations, then shot up during the final two months of the fiscal year as Russia began its invasion of Ukraine.
The average price of oil last year was $77 US per barrel. It currently sits at $111.
Trevor Tombe, a University of Calgary economist, said Monday before the numbers were released that economists have been expecting to see a historic rebound.
“It’s really impossible to overstate just how dramatic a turnaround this is,” he said. “And it’s really driven by oil prices rising.”
As people tried to move beyond the COVID-19 pandemic, economic activity increased, and the provincial government collected more corporate and personal income taxes than expected.
Both increased oil prices and more oil and gas production facilities reaching payout — which allows the government to collect higher royalties— contributed to the record-breaking resource revenue haul.
About half of the province’s income came from non-renewable resource revenues.
Finance officials confirmed the previous record for those revenues was $14.3 billion collected in 2005-06.
The government also said its partial purchase and renegotiation of the arrangement governing the Sturgeon Refinery saved money.
The provincial debt hit $93 billion on March 31 after the government repaid $1.5 billion it owed. The market value of the Heritage Savings Trust Fund is also up to $20 billion.
The government also spent $2.5 billion more than planned. Overall expenditures were $64.4 billion last year.
The fourth-quarter financial report says COVID-19 response and recovery was more expensive than they’d anticipated, with health-care costs coming in $1.7 billion more than budgeted.
Dispensing $2.9 billion in disaster relief to farmers hammered by drought during the summer of 2021 also drove up expenses.