The Alberta government has announced Finance Minister Travis Toews will table his 2023 provincial budget on Feb. 24, and he may accomplish something an Alberta finance minister hasn’t done since Doug Horner in 2014.
“It’s going to be a challenge for the government to actually not table a balanced budget,” said University of Calgary Economics professor Trevor Tombe.
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“Markets are kind of anticipating oil averaging about $76 per barrel in the coming fiscal year, and we only need $71 dollars per barrel in order to balance.”
Just eleven months ago, Minister Toews tabled budget 2022, which came with a deficit north of $18 billion.
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But oil prices have surged significantly since then. West Texas Intermediate (WTI) heads into the weekend above $80 per barrel, Western Canadian Select (WCS) above $71.
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These rising prices have lowered the projected deficit for 2022 to around $5.8 billion.
“It’s really a large reversal of fortune,” Tombe said.
If it comes to fruition, it is a major fiscal win for the UCP government, which campaigned on balancing the budget in its first term.
Some political watchers don’t believe it will end all of the government’s problems.
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“To be in a position where you’ve balanced the current budget is absolutely a good thing,” said Lori Williams, and associate professor of Policy Studies at Mount Royal University in Calgary.
“Most of the attention is going to be focused on the continuing challenges Albertans face.”
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Williams points to the health care system, which is under significant stress from the COVID-19 pandemic, as well as issues around unemployment and the rising cost of living.
“Unless those are addressed, then this isn’t going to be enough to mend the party’s unpopularity,” Williams added.
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