(Corrects previous forecast in second paragraph to C$1.1 billion from C$2.6 billion)
CALGARY, Alberta, Nov 26 (Reuters) - The Canadian province of Alberta, the largest exporter of oil to the United States, said on Wednesday it still expects to post an operating budget surplus for the current fiscal year despite lower prices for crude.
Robin Campbell, the province’s finance minister, said in his second-quarter budget update that Alberta expects to post a C$933 million ($830.8 million) surplus in the 2014/2015 fiscal year, down from the C$1.1 billion it forecast in March when it presented the budget.
Alberta, whose oil sands are the world’s third largest crude reserve, relies on payments from its oil and gas sector for about a third of its budget. Despite a 30 percent drop in benchmark crude prices since late June, the province bumped up its revenue expectations to C$45 billion, up C$600 million from its budget.
”Oil revenues are down right now but understand the Alberta economy is doing great,“ Campbell told reporters on a conference call. ”Our forest industry is doing well, agriculture is doing well, we’re doing well in manufacturing. ... We have some challenges in revenue at the government level but the province from an economy point of view is doing quite well.
Alberta now expects oil prices to average $88.88 a barrel over the fiscal year that ends on March 31, down from its initial estimate of $100.08. It still expects higher corporate taxes and a C$146 million increase in resource revenue.
Spending, outside of planned capital projects, is expected to total C$40.9 billion, up from C$40.4 billion called for in the March 2014 budget. However, the government plans to cut back on the borrowing it does to pay for the new schools, hospitals and other infrastructure needed in the rapidly growing province. It now expects to borrow C$2.2 billion, down from an originally expected C$4.9 billion.
The second-quarter fiscal update is the first presented by Campbell, who became finance minister in September when Jim Prentice, a former federal minister and investment banker, became the province’s premier and revamped his cabinet.
1 US dollar = 1.1230 Canadian dollar Reporting by Scott Haggett; Editing by Diane Craft and Leslie Adler