‘Fiscal results are promising,’ says Snelgrove
Strong crude prices, increased oilsands production and booming Crown land sales helped the Alberta government trim its deficit in 2010-11, at the same time the province handed back $2.4 billion in potential royalties to the energy sector.
The billions of dollars in government incentives to petroleum producers have opposition leaders and educators demanding at least $100 million in additional education funding to stave off hundreds of teacher layoffs across the province.
The Alberta government posted a $3.4-billion deficit in the 2010-11 fiscal year -$1.3 billion less than initially forecast -thanks to eye-popping oil and gas land sales and bitumen royalties, the province reported Wednesday in its annual report.
While the economy grew by 3.8 per cent last year, the government still faces a number of fiscal challenges, collecting about $1 billion less in personal and corporate income taxes that predicted in last year’s budget.
The smaller deficit means the rainy day Sustainability Fund, which is covering off the shortfall, still sits at $11.2 billion -approximately $3 billion more than budgeted -as the province rebounds from the economic slump.
“We resisted calls to increase spending or to make drastic cuts,” Finance Minister Lloyd Snelgrove told reporters at the legislature. “The fiscal results are promising and all indications certainly point in positive directions.”
NDP Leader Brian Mason congratulated the Stelmach government “on the rise of international oil prices” for improving Alberta’s bottom line, rather than any prudent fiscal management.
“It has clearly released a lot of pressure on the province’s balance sheet and has improved the financial position of the province,” Mason said.
Scott Hennig, Alberta director of the Canadian Taxpayers Federation, noted the government ran a $3.4-billion deficit while the economy was actually booming.
“We’re in good times now. If this government can’t balance its budget when times are good, when are we ever going to be able to balance the budget?” he said.
Total government revenue was almost $34.9 billion last fiscal year, while spending reached nearly $38.3 billion -about $452 million less than budgeted, partly due to delays in infrastructure spending on health facilities and other projects.
In a further sign the oilsands are king in Alberta’s energy industry, bitumen royalties totalled $3.7 billion -more than conventional oil and natural gas combined. Sales of Crown leases reached $2.6 billion ($2 billion more than expected), part of nonrenewable resource revenue that totalled $8.4 billion.
“The oilsands have come of age,” Snelgrove said.
While the improvement in the ledger can be attributed to the energy sector, a series of royalty breaks and drilling incentives offered to the industry cost the government billions in economic rent, according to the Alberta Energy annual report.
Seven royalty reduction programs and the drilling stimulus program -which are designed to spur activity in the oilpatch and produce from otherwise uneconomic wells -cost the government more than $2.4 billion in royalties in 2010-11, approximately $1 billion more than the previous year.
“A billion is a lot of money,” Snelgrove acknowledged. “It has stimulated a lot of jobs.”
Opposition parties seized on the royalty giveback, insisting it demonstrates the government can easily afford to throw an additional $100 million to education to prevent teacher layoffs across the province, including 171 front-line positions in Calgary’s public schools.
“If oil is worth well over $80 a barrel and we can provide this kind of money to the energy sector, surely we can provide $100 million to the education sector,” said Liberal finance critic Hugh MacDonald.
Read more: http://www.calgaryherald.com/business/Alberta+deficit+shrinks/5028319/story.html#ixzz1Qo0uvzOp
The billions of dollars in government incentives to petroleum producers have opposition leaders and educators demanding at least $100 million in additional education funding to stave off hundreds of teacher layoffs across the province.
The Alberta government posted a $3.4-billion deficit in the 2010-11 fiscal year -$1.3 billion less than initially forecast -thanks to eye-popping oil and gas land sales and bitumen royalties, the province reported Wednesday in its annual report.
While the economy grew by 3.8 per cent last year, the government still faces a number of fiscal challenges, collecting about $1 billion less in personal and corporate income taxes that predicted in last year’s budget.
The smaller deficit means the rainy day Sustainability Fund, which is covering off the shortfall, still sits at $11.2 billion -approximately $3 billion more than budgeted -as the province rebounds from the economic slump.
“We resisted calls to increase spending or to make drastic cuts,” Finance Minister Lloyd Snelgrove told reporters at the legislature. “The fiscal results are promising and all indications certainly point in positive directions.”
NDP Leader Brian Mason congratulated the Stelmach government “on the rise of international oil prices” for improving Alberta’s bottom line, rather than any prudent fiscal management.
“It has clearly released a lot of pressure on the province’s balance sheet and has improved the financial position of the province,” Mason said.
Scott Hennig, Alberta director of the Canadian Taxpayers Federation, noted the government ran a $3.4-billion deficit while the economy was actually booming.
“We’re in good times now. If this government can’t balance its budget when times are good, when are we ever going to be able to balance the budget?” he said.
Total government revenue was almost $34.9 billion last fiscal year, while spending reached nearly $38.3 billion -about $452 million less than budgeted, partly due to delays in infrastructure spending on health facilities and other projects.
In a further sign the oilsands are king in Alberta’s energy industry, bitumen royalties totalled $3.7 billion -more than conventional oil and natural gas combined. Sales of Crown leases reached $2.6 billion ($2 billion more than expected), part of nonrenewable resource revenue that totalled $8.4 billion.
“The oilsands have come of age,” Snelgrove said.
While the improvement in the ledger can be attributed to the energy sector, a series of royalty breaks and drilling incentives offered to the industry cost the government billions in economic rent, according to the Alberta Energy annual report.
Seven royalty reduction programs and the drilling stimulus program -which are designed to spur activity in the oilpatch and produce from otherwise uneconomic wells -cost the government more than $2.4 billion in royalties in 2010-11, approximately $1 billion more than the previous year.
“A billion is a lot of money,” Snelgrove acknowledged. “It has stimulated a lot of jobs.”
Opposition parties seized on the royalty giveback, insisting it demonstrates the government can easily afford to throw an additional $100 million to education to prevent teacher layoffs across the province, including 171 front-line positions in Calgary’s public schools.
“If oil is worth well over $80 a barrel and we can provide this kind of money to the energy sector, surely we can provide $100 million to the education sector,” said Liberal finance critic Hugh MacDonald.
Read more: http://www.calgaryherald.com/business/Alberta+deficit+shrinks/5028319/story.html#ixzz1Qo0uvzOp
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