The Alberta government has announced that Finance Minister Travis Toews will present his 2023 provincial budget on February 24, and he may accomplish something an Alberta finance minister hasn’t since Doug Horner in 2014.
“It will be a challenge for the government not to come up with a balanced budget,” said Trevor Tombe, an economics professor at the University of Calgary.
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“Markets are anticipating oil to average around $76 a barrel in the next fiscal year, and we only need $71 a barrel to break even.”
Just eleven months ago, Minister Toews presented the 2022 budget, which arrived with a deficit of more than $18 billion.
But oil prices have risen significantly since then. West Texas Intermediate (WTI) heads into the weekend above $80 a barrel, Western Canadian Select (WCS) above $71.
These rising prices have reduced the projected shortfall for 2022 to about $5.8 billion.
“It’s really a big change of fortune,” Tombe said.
If it comes to fruition, it will be a major fiscal victory for the UCP government, which campaigned to balance the budget in its first term.
Some political observers don’t think it will end all the government’s problems.
“Being in a position where you’ve balanced the current budget is an absolutely good thing,” said Lori Williams, an associate professor of policy studies at Mount Royal University in Calgary.
“Most of the focus will be on the continuing challenges facing Albertans.”
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Williams points to the health care system, which is under significant stress from the COVID-19 pandemic, as well as issues related to unemployment and rising cost of living.
“Unless these are addressed, this will not be enough to repair the unpopularity of the match,” Williams added.
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