The Government of Alberta highlighted the need to diversify its economy away from oil and natural gas and into areas such as technology and tourism as it unveiled a provincial budget that is awash in red ink.
The Alberta budget projects a deficit of $6.8 billion on revenues of $50 billion. Debt is expected to rise to almost $77 billion by spring 2021 and to almost $88 billion by 2023. However, the provincial government of Premier Jason Kenney predicts better times ahead in the oil sector as pipeline projects come online and exports increase. Natural resource revenue, about 10% of total income, is expected to grow 15% by 2022-23.
With the bottom line deep in the red, Kenney's government continues to hold the line on program spending while pursuing job, benefit and salary cuts from thousands of public-sector workers. Additionally, the government has made economic diversification the centrepiece of its latest budget, spending $200 million to support research and innovation, and to create jobs in areas such as artificial intelligence, technology, aviation, tourism and financial services.
Kenney's United Conservatives were elected last April on a promise to focus on oil and gas and bring jobs back to Alberta by reducing the corporate income tax rate and red tape. But since last June, 50,000 full-time jobs have been lost. The unemployment rate was 6.9% in 2019 and is forecast to be 6.7% this year.
The budget forecasts that the oil benchmark West Texas Intermediate will average $58 U.S. a barrel in the coming year. It is currently hovering at about $50 U.S. due mainly to the novel coronavirus outbreak that is reducing demand in China.
The Government of Alberta still plans to have the budget balanced before the end of its mandate. It is forecasting a $700-million surplus in 2022-23.
