The Government of Alberta has lowered its budget surplus forecast by almost $1 billion following a series of tax breaks and social program enhancements designed to help residents of the province cope with inflation.
The provincial government now forecasts a budget surplus of $12.3 billion for the current fiscal year that ends March 31, 2023. That’s down from a previous forecast of $13.2 billion.
The smaller surplus reflects a $2.5 billion increase in expenses, including $1.3 billion to cover inflation measures such as a six-month suspension of the provincial fuel tax, support for parents, and other social benefits.
Alberta, which holds the world’s third-largest oil reserves, is benefiting from oil prices that surged as high as $130 U.S. a barrel immediately following Russia’s invasion of Ukraine earlier this year. However, prices have since dropped below $80 U.S. per barrel.
While the new budget surplus forecast is lower than what was projected in August of this year, it is still more than 20 times larger than the original forecast for a surplus of $515 million made this past February.
The province ran a $16.9 billion deficit in the previous fiscal year ended March 31, 2022 due to depressed oil prices and declining energy investments during the pandemic.
