Alberta lowers budget deficit projections amid rising oil prices
The Alberta government lowered its 2018-2019 budget deficit projection by $1 billion as higher oil prices boosted revenue for the province.
According to Reuters, the 2018-19 deficit outlook fell to $7.8 billion, compared with $8.8 billion projected in March, the government said in a statement.
The 2018-19 fiscal year ends on March 31.
Revenue is forecast to reach $49.1 billion, 2.5 per cent higher than the budget projection made in March. Borrowing estimates also fell, due in part to the smaller deficit.
Alberta was hit hard by the selloff in oil prices that began in 2014, triggering a major industry downturn. In the last few years, global energy players have been pulling back from Canada, while oil producers have cut costs and laid off employees.
But Alberta’s energy-dependent economy has benefited from a recent rebound in oil prices, which has translated into improved financial results from the energy producers.
The province raised its real GDP forecast for 2019 to 2.7 per cent, from 2.5 per cent earlier.
“I am pleased with these results. Jobs are up. The economy is growing. And the deficit is down,” Finance Minister Joe Ceci said in a statement to Reuters.
The forecasts come a day after a Canadian court overturned approval of the Trans Mountain oil pipeline expansion. The court said in a ruling that Ottawa failed to adequately consider aboriginal concerns.
That court decision does not affect the government’s finances for the 2018-19 fiscal year, but is a negative for Alberta’s economy, the Alberta government said.