The Alberta Government is planning to make the largest single-year debt payments and also reinvest in the Heritage funds as finances come into line.
Last week the Alberta government provided a quarterly update. The Alberta Government delivered some good financial news as high bitumen and resource royal forecasts and corporate income taxes have driven up the province’s forecasted surplus to $13.2 billion this fiscal year.
“For too long, governments in Alberta refused to exercise fiscal discipline during boom times. Those days are over. Alberta’s government is making the prudent decision to save and invest surplus revenues so future generations can benefit from the prosperity of today,” said Jason Nixon, President of the Treasury Board and Minister of Finance.
MLA for Drumheller-Stettler and Minister of Agriculture Forestry and Rural Economic Development Nate Horner is pleased with the update.
“It’s amazing. Obviously, it is largely based on royalties but it is so encouraging after all the problems the province has been through and all the debt it has had to take on to have a surplus like that is just great,” Horner tells the Mail.
With this surplus, the province is planning to repay $13.4 billion in debt that comes due this fiscal year and is planning to allocate a further $5.2 billion to debt in the next fiscal year.
The province is also planning to top up The Heritage Trust Fund, by retaining the fund’s net investment income from the previous year and adding to it, for a total investment of $2.9 billion.
“The Heritage Fund has historically done very well, I think Albertans would love to see it grow substantially,” said Horner. “It is the highest it has ever been, but we have the potential to put in close to another $4 billion, and the first step is to stop taking income out of it, but that could grow it by 20 per cent in one year.”
The financial position allowed the government to fulfill its commitment to re-index personal income tax to inflation. This means the personal income tax amount will be rising to $19,814, and will be tied to inflations. As inflation rises, so will Alberta residents’ personal tax amount. This will be retroactive to the 2022 tax year.
“It was always described as a pause. It was a thing we felt we had to do when we were looking at a $20 billion deficit, just to slow things down, but we always said we would like to reindex it,” said Horner.