Alberta: Mid‑year Fiscal Update 2023 - Holding the Line on Spending as Oil Prices, Population Boom Fill Coffers

Alberta’s Mid‑year Fiscal Update and Economic Statement for fiscal year 2023–24 (FY2024) increased surplus projections for the next three fiscal years. The headliner is a hefty $5.5B surplus in FY2024, more than double the amount previously assumed.

The province now anticipates that its net debt burden will fall from 9% of GDP this year to 7.5% by FY2026, still far and away the lowest rate of any province.

Forecasts are prudent. Oil price projections on which the plan is based are reasonably conservative, which is appropriate given the present uncertainty about global growth and the province’s historic fiscal sensitivity to crude values. Contingencies of $1.5B per year remain in place beyond FY2024.

New operating spending was incremental—in line with previously outlined spending caps—and a personal income tax cut promised during this year’s provincial election campaign is not going ahead at this time.

Overall, while the global economic backdrop remains uncertain, barring a severe downturn, Alberta’s economy and public finances still look likely to avoid the worst.