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Province now $33.3 billion in debt

Jun 29, 2017 | 1:49 PM

MEDICINE HAT, AB — The Alberta government is now $33.3 billion in debt after borrowing money to finance its operational and capital spending.

The number was revealed Thursday when the province released its annual financial report for 2016-17.

Alberta finished 2016-17 with a $10.8 billion deficit which was in line with the most recent forecast from finance minister Joe Ceci, but up from the $10.4 billion that was estimated when the NDP released their 2016 budget.

Revenue for the year actually increased by $1 billion from the 2016 budget prediction of $41.4 billion, thanks in large part to higher oil and gas royalties and better-than-expected Heritage Fund investment returns.

However, consolidating the province’s electric Balancing Pool — which has taken over the financial responsibility of terminated Power Purchase Agreements as a result of the NDP’s carbon tax and plan to phase out coal — decreased net financial assets by $2 billion this year.

The Wood Buffalo wildfire is also cited as a reason for the deficit increase with the government saying it cost $710 million to fight, and resulted in lost royalties and personal and corporate income tax to the tune of $300 million

When it comes to Alberta’s GDP the province estimates it contracted 3.5 per cent in 2016 after contracting 3.6 per cent in 2015.

During the fiscal year 31,000 Albertans lost their jobs, but after bottoming out last July employment has rebounded by adding 44,000 full-time ones from then until March.

The NDP says the tide is turning though as manufacturing sales climbed during the last half of the fiscal year, and rig activity nearly doubling by the end of 2016-17.

The benchmark price for oil averaged $47.93 USD per barrel in 2016-17 which was up from the NDP’s 2016 budget prediction of $42, which explains the increase in expected royalties.

This year’s $10.3 billion deficit budget pegs oil averaging $55 USD per barrel, but currently it’s hovering around $44 USD per barrel.

Government officials say they now plan on updating this year’s deficit forecast to better reflect current oil prices during the first-quarter of the next fiscal year.