Strong oil price gives Alberta financial firepower for cutting debt and spending Column by ChrisVarcoe ableg abpoli
Budgets are all about choices and Finance Minister Travis Toews has at least three big ones to make in his new budget on Tuesday, as Alberta has plenty of financial firepower at hand given high oil prices, a strong economy and rapidly falling debt levels.Sign up to receive daily headline news from the Calgary Herald, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc.
“Let’s put it this way — it’s a great problem to have if you’re debating the best way to use a surplus. It speaks volumes as to where your situation is compared to two years ago.”In the February budget that year, total taxpayer-supported debt was projected to rise to a whopping $116 billion by the end of 2021-22, up from $98 billion.Thankfully, it didn’t come to pass.
Every $1-per-barrel change in benchmark oil prices over the course of the year could potentially swing government revenues by $600 million or more, said University of Calgary economist Trevor Tombe. Travis Shaw, senior vice-president with DBRS Morningstar, said it’s reasonable to expect another budget surplus in Alberta, given where commodity prices are sitting, but there are growing pressures to spend more.
It surveyed more than 500 business operators last summer about what should be done with the surging resource revenues and asked them to rank two priorities.Meanwhile, 35 per cent selected reducing taxes, 34 per cent wanted to save the excess — such as in the Heritage Fund — and 22 per cent wanted the government to increase spending on public services.
NDP MLA Kathleen Ganley said the cost of living for Albertans is increasing and the province’s unemployment rate remains above the national average.“Those funds belong to Albertans and they should be invested in the future of the people of this province.”
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