CALGARY, Alberta (Reuters) - The Canadian province of Alberta, the largest oil exporter to the United States, said on Thursday it expects to post a smaller budget deficit in the upcoming fiscal year as economic growth boosts revenue from taxes.
The first budget under new Premier Alison Redford, expected to be the basis of her Progressive Conservative party’s platform for a spring election, called for a deficit of C$886 million ($886 million) for the 2012-13 fiscal year that begins April 1, down from a forecast C$1.32 billion shortfall for the current year.
Finance Minister Ron Liepert credited higher transfers from the federal government and better investment for the narrowing deficit, but said a strong economy was the leading reason as the province’s tax revenue rose.
He trumpeted Alberta’s economic growth, forecast at 3.8 percent in 2012, in contrast to other jurisdictions still teetering on the brink of recession, as billions of dollars were invested in its oil sands, the world’s third-largest oil deposit.
“Between 2008 and 2009 ... Alberta lost 28,000 jobs. But by June 2011, all of those jobs had been recovered, plus additional new ones were created,” Liepert said in his budget speech. “In fact, in that month, June of last year, the Alberta economy created more jobs than were created in the entire United States.”
The province’s deficit, the fifth-straight budget shortfall, is down from an expected C$1.32 billion for the current fiscal year. But Liepert said the province expects to return to surplus budgets in 2013-14 and forecasts a C$5.2 billion surplus for 2014-15.
The province expects revenue for the upcoming fiscal year to rise C$1.76 billion to C$40.26 billion while expenses will be C$41.15 billion, up C$1.3 billion, as the government spends more on health, education and human services.
Liepert said proceeds from oil and gas land lease sales have grown from C$1.2 billion in 2009-10 to a forecast record of C$3.3 billion this year.
However, he warned that depressed natural gas prices were pressuring provincial coffers. Gas revenues are estimate this year at C$1.2 billion, just a fifth of what they were four years ago.
Alberta pays for its deficits from a sustainability fund set up prior to the recession. That fund now contains C$3.7 billion.
Reporting by Scott Haggett and Jeffrey Jones; editing by Rob Wilson