Depressed oil prices help push Alberta deficit to $6.4B last fiscal year

EDMONTON – The Alberta government says depressed oil prices and a shrinking economy pushed its deficit up to $6.4 billion last year — $324 million higher than expected.

Revenues for the fiscal year that ended March 31 were down more than anticipated due mainly to lower oil revenue and a reduced take in corporate and personal income taxes.

The government’s annual financial report says Alberta’s economy contracted by 3.7 per cent in 2015.

Spending increased for health care and education — areas the New Democrats have pledged to shield from the economic downturn.

Finance Minister Joe Ceci said the NDP have chosen to maintain key public services during challenging times instead of laying off staff and making deep spending cuts.

“In the past, when the boom went bust, government made severe cuts that hurt Alberta families,” Ceci said Wednesday. “As Albertans, we all paid for this through infrastructure falling into disrepair, overcrowded classrooms and a health system in crisis.

“We will not repeat those mistakes.”

The grim numbers illustrate an economy shaken by a steep drop in non-renewable resource revenue to $2.8 billion last year from $8.9 billion in 2014-15.

The report noted that the price of a barrel of oil fell to the mid-US$40 range from a high of US$105 during the same period.

In April, Ceci introduced a budget that forecasts a $10.4-billion deficit in the current fiscal year and no return to a balanced budget until 2024.

The government plans to wait until its next budget update in August to estimate how the Fort McMurray wildfire will affect its bottom line.

Progressive Conservative Leader Ric McIver said the NDP could cut spending by about $4 billion without affecting front-line government services.

“What is most concerning is that they don’t seem to have any willingness to make the tough choices that a government should make,” he said.

“This government owes it to Albertans — to Albertans’ children and grandchildren, who will ultimately carry the burden of the poor choices being made by this government — to start taking that job and that responsibility seriously.”

The Wildrose Opposition also went after the government for not cutting spending. Wildrose Leader Brian Jean pointed to Alberta’s ballooning $19.5-billion debt.

“Growing interest payments just to service the debt mean less money going to hospitals, schools, teachers and nurses for the long term,” Jean said in a release.

The report pegs the government’s rainy-day Contingency Account at $3.6 billion, down by $2.9 billion from the previous year. The province expects to burn through the remaining money this year.