(Reuters) – Canadian oil-producing province Alberta expects a budget surplus of C$13.2 billion ($10.1 billion) in the 2022-23 fiscal year, significantly higher than the C$511 million surplus estimated in its budget, helped by a boom in energy prices.
That more-than twenty-fold increase in Alberta’s estimate is pegged on expectations of higher income from bitumen royalties, other resource revenue and corporate taxes in the current fiscal year, the provincial government said on Wednesday.
Alberta is Canada’s largest oil-producing province and home to the oil sands, the world’s third-largest crude reserves. Its economy is closely tied to oil prices, which have surged this year on factors including supply concerns after Russia’s invasion of Ukraine.
The province now expects non-renewable resource revenue of C$28.4 billion in the fiscal year, more than double its budget forecast. Total 2022-23 revenue is estimated at C$75.9 billion.
Alberta plans to use the extra cash to pay off C$13.4 billion in debt this year and save billions more for debt maturing next year. This year’s debt repayment is the largest ever for the province and would be made without borrowing new money.
“While energy prices are high right now, Alberta needs to take this opportunity to strengthen provincial finances for the long term,” Alberta Finance Minister Jason Nixon said at a news conference.
Jason Kenney, in his last weeks as Alberta’s premier, said in a statement that his government was “paying down debt so future generations won’t have to.”
Kenney resigned as the United Conservative Party (UCP) leader after getting only a slim majority in a leadership review in May and will hand over reins once his party elects a new leader, expected in October.
Nixon, asked how the outcome of the leadership contest may impact financial plans, said he was “very confident” that his fiscal approach had the support of the majority of the party and the leadership candidates.
The provincial election is due in spring 2023, when the UCP’s main opposition is expected to be the New Democratic Party led by Rachel Notley.
($1 = 1.3092 Canadian dollars)
(Reporting by Ismail Shakil in Ottawa; Editing by Chizu Nomiyama, Kirsten Donovan)
