Alberta Premier Danielle Smith and Finance Minister Nate Horner speak before delivering the 2024 budget in Edmonton, on Feb. 29.JASON FRANSON/The Canadian Press
Alberta’s conservative government spent more than planned in the past fiscal year as natural disasters, including record-setting wildfires, cost the province billions of dollars – expenses the Finance Minister considers irregular.
Nate Horner, in the government’s fiscal update Thursday, said Alberta posted a surplus of $4.28-billion for 2023-2024 compared to its original forecast of $2.35-billion. But while revenue hit $74.73-billion, spending jumped to $70.44-billion, up 3 per cent compared to the budget and 9 per cent over the year prior.
The Finance Minister attributed the rising expenses to emergency assistance costs related to fires, floods and drought. The province spent $3.02-billion because of disasters, including $1.8-billion supporting the agricultural sector in the wake of the drought of the spring and summer of 2023, and $851-million fighting wildfires. The United Conservative Party’s original budget, released in February, 2023, did not allocate any money for such disaster relief. It did, however, set aside $1.5-billion as a contingency.
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“This was a challenging year – to have a wildfire bill that high, coupled with needing to prop up the crop insurance fund,” Mr. Horner told reporters. “So I would like to look at this as an anomaly.”
But last year’s disaster costs are part of the reason why the government increased the contingency fund to $2-billion for 2024-2025, he said. At the same time, Mr. Horner said the contingency cushion is not meant to be used exclusively for disaster relief.
Mr. Horner said Alberta also struggled with its growing population, which expanded by 204,677 people, or 4.41 per cent, in the past fiscal year. That marked the highest year-over-year growth rate since 1981, according to government data.
The province’s surplus cash totalled $7.3-billion at the end of last year, including cash from the year prior. Mr. Horner said half will be earmarked to repay debt and half will go to the new Alberta Fund, which can be used for debt, one-time capital expenses and the Alberta Heritage Savings Trust Fund.
The heritage fund is worth roughly $23-billion, and Premier Danielle Smith later this year intends to release a road map to expand it to the range of $250-billion to $400-billion by 2050. Ms. Smith, earlier this month, mused about using the fund for “derisking” projects and firms in Alberta struggling to get financing. She said Mr. Horner would unveil more details about the strategy to assist projects and companies in Alberta in the fall.
The Finance Minister, however, stressed the savings fund must focus on generating money and practice top-shelf governance.
“That wouldn’t preclude it from investing in Alberta, in a strategic way potentially, but it has to be return-seeking. Highest governance, best rate of return,” he said.
Alberta’s revenue from non-renewable resources clocked in at $19.28-billion for the year ended March 31, 2024, down $926-million compared to the budget and $6-billion less than the year prior. West Texas Intermediate oil, the North American benchmark, averaged US$77.83 per barrel on the year, compared to the budget’s assumption of US$79 per barrel.
Personal income taxes brought in $15.16-billion, about $1.1-billion more than expected, and corporate taxes generated $7.04-billion, about $1.13-billion more than anticipated.
Editor’s note: A previous version of the story stated Alberta’s surplus was up 5.7 per cent compared to its original forecast of $2.35-billion. The correct percentage is 80.