EDMONTON – The Government of Alberta is pointing to COVID-19 and the collapse of oil prices as the cause of a “historic” deficit.
The government released its 2019-20 Annual Report and 2020-21 First Quarter Fiscal Update and Economic Statement which indicates the province is facing a taxpayer-supported debt burden of $99.6 billion on March 31, 2021. Total expense is forecast at $62.6 billion.
The first-quarter projections show a significant increase to the deficit reaching $24.2 billion, which is $16.8 billion higher than was estimated in the 2020 budget.
“Almost 70 per cent of this increase is due to a sharp decline in revenue with non-renewable resource revenue down $3.9 billion. Total revenue is estimated to be $38.4 billion, down $11.5 billion, or 23 per cent from Budget 2020,” a government release stated.
An updated economic forecast showed the pandemic negatively affected business investment, oil production and consumer spending and Alberta’s economy is expected to contract by 8.8 per cent in 2020.
“These numbers are incredibly sobering to all of us. If left unchecked, they predict a grim reality for Albertans. We are facing the most significant economic challenge of our generation. To deal with this challenge, our government is developing a path forward – a path of economic recovery that will see job creation, diversification and stability restored to Alberta’s finances,” Alberta Minister of Finance and Treasury Board president Travis Toews said in the statement.
Approximately $1.4 billion has been added to the 2020-21 Capital Plan, with total capital spending for the year now at $8.4 billion. The majority of these increases reflect economic stimulus and support for municipalities as part of Alberta’s Recovery Plan, the release stated.
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