The Government of Alberta has balanced its budget for the first time since 2014 as surging oil prices brought a windfall of oil and gas royalties to the province.
Alberta, which is the world’s fourth largest oil producer and home to Canada’s oil sands, will record a $511 million surplus in its 2022 fiscal year that starts on April 1. That compares to a deficit of $3.2 billion in the 2021 fiscal year, according to the budget documents.
The surplus is the first in eight years and marks a turnaround from just a year ago, when Alberta’s finance ministry expected a deficit of $18 billion for 2021 as the COVID-19 pandemic suppressed economic activity. At that time, the Alberta government wasn’t expecting a balanced budget until 2024.
The turnaround comes amid a surge of tax and royalty revenue driven by oil prices that surpassed $100 U.S. a barrel for the first time since 2014, after Russia invaded Ukraine.
Resource revenue, including oil sands royalties, is expected to jump to $13.8 billion in fiscal 2022, up from a year earlier when just $2.86 billion in resource revenue was budgeted for the year ahead.
Tax revenue is projected to rise to $23 billion in fiscal 2022 from $22.1 billion in 2021, while expenses will fall to $62.1 billion in the 2022 budget year from $64.9 billion a year ago.
Alberta, the biggest foreign supplier of crude oil to the U.S., is budgeting for West Texas Intermediate crude, the U.S. benchmark, to average $70 U.S. a barrel in the coming fiscal year.
So far this year, U.S. oil has averaged more than $86 U.S. a barrel as tensions between Russia and Ukraine worsen and energy demand surges as pandemic restrictions ease.
