(By: David Opinko)

Although the Government of Alberta is reporting a growing budget surplus, it says it needs to continue being careful going forward.

The province says its projected surplus will be $4.6 billion at the end of 2024-25. That is up from $2.9 billion in the first quarter forecast and $355 million from the budget.

Much of the improvement is due to higher revenues from personal income taxes and non-renewable resources.

The Second Quarter Fiscal Update and Economic Statement, however, warns of growing pressures on the budget due to population growth.

Although the Government of Alberta is reporting a growing budget surplus, it says it needs to continue being careful going forward.

The province says its projected surplus will be $4.6 billion at the end of 2024-25. That is up from $2.9 billion in the first quarter forecast and $355 million from the budget.

Much of the improvement is due to higher revenues from personal income taxes and non-renewable resources.

The Second Quarter Fiscal Update and Economic Statement, however, warns of growing pressures on the budget due to population growth.

Revenue

• Revenue for 2024-25 is forecast at $77.9 billion, an increase of $4.4 billion from Budget 2024, including:
  • $16.6 billion forecast from personal income taxes, up from $15.6 billion at budget.
  • $20.3 billion forecast from non-renewable resource revenue, up from $17.3 billion at budget.

Expense

• Expense for 2024-25 is forecast at $73.3 billion, an increase of $143 million from Budget 2024.

Surplus cash

• After calculations and adjustments, $2.9 billion in surplus cash is forecast.
  • $1.4 billion or half will pay debt coming due.
  • The other half, or $1.4 billion, will be put into the Alberta Fund, which can be spent on further debt repayment, deposited into the Alberta Heritage Savings Trust Fund and/or spent on one-time initiatives.

Contingency

• Of the $2 billion contingency included in Budget 2024, a preliminary allocation of $1.7 billion is forecast.

Alberta Heritage Savings Trust Fund

• The Alberta Heritage Savings Trust Fund grew in the second quarter to a market value of $24.3 billion as of Sept. 30, 2024, up from $23.4 billion at the end of the first quarter.
  • The fund earned a 3.7 per cent return from July to September with a net investment income of $616 million, up from the 2.1 per cent return during the first quarter.

Debt

• Taxpayer-supported debt is forecast at $84 billion as of March 31, 2025, $3.8 billion less than estimated in the budget because the higher surplus has lowered borrowing requirements.
  • Debt servicing costs are forecast at $3.2 billion, down $216 million from budget.

The full Second Quarter Fiscal Update and Economic Statement can be found on the Government of Alberta’s website.