Canada's Alberta ups spending with higher C$10.3 billion deficit

Thu Mar 16, 2017 6:27pm EDT
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By Ethan Lou

CALGARY, Alberta (Reuters) - The Canadian crude-producing province of Alberta will post a higher-than-expected budget deficit of C$10.3 billion (US$7.73 billion) in the coming fiscal year, it said on Thursday, raising spending as its economy recovers.

Alberta, home to Canada's oil sands and the No. 1 exporter of crude to the United States, has benefited from higher global crude prices since a long decline bottomed out at $26 a barrel last year.

That recovery, along with a pickup in manufacturing exports, have boosted Alberta's economy, which will grow by 2.6 percent in 2017, according to the province.

Nonrenewable resources revenue, including from oil and gas, will increase to C$3.8 billion. The projected deficit for 2017-18 was higher than the C$10.1 billion forecasted last year, but lower than 2016-17's C$10.4 billion, which itself had been revised to become lower than expected.

But the province's left-leaning New Democratic Party government, which swept to victory in 2015, said it was prepared to tolerate deficits. Thursday's budget, with C$29.5 billion in capital spending over four years, reiterated that the province would protect public services.

The budget is for fiscal 2017-2018 which begins on April 1.

Finance Minister Joe Ceci told a news conference an increase of 2.2 percent of the province's operating expenses to C$55 billion was more than previously forecast, but the government may have a lower deficit for 2017-18 if it does not encounter unexpected spending.

"We will continue to bring the deficit down to balance and we will do so without sacrificing the supports and services families need," Ceci said.   Continued...

FILE PHOTO: An oil pump jack pumps oil in a field near Calgary, Alberta, Canada on July 21, 2014.  REUTERS/Todd Korol/File Photo