The Alberta government has announced that Finance Minister Travis Toyos will present his regional budget for 2023 on February 24, and he may accomplish something that Alberta Finance Minister Doug Horner hasn’t done since Doug Horner in 2014.
“It would be difficult for the government not to have a balanced budget,” said Trevor Tombe, professor of economics at the University of Calgary.
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“Markets are kind of expecting oil to average around $76 a barrel in the next fiscal year, and we just need $71 a barrel in order to balance it out.”
Just eleven months ago, Minister Toyos presented the 2022 budget, which came with a deficit north of $18 billion.
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But oil prices have skyrocketed since then. West Texas Intermediate (WTI) heads into the weekend above $80 a barrel, while Western Canadian Select (WCS) heads above $71.
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These higher prices have reduced the projected deficit for 2022 to about $5.8 billion.
“It really is a huge fortune shift,” Tumbe said.
If it pays off, it is a major financial gain for the UCP government, which has campaigned to balance the budget in its first term.
Some political observers do not believe that this will end all of the government’s problems.
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“Being in a position to balance the current budget is perfectly fine,” said Laurie Williams, associate professor of political studies at Mount Royal University in Calgary.
“Most attention will be focused on the continuing challenges that Albertans face.”
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Williams points to the health care system, which is under significant pressure from the COVID-19 pandemic, as well as issues related to unemployment and the rising cost of living.
“Unless these issues are addressed, this will not be enough to fix the party’s unpopularity,” Williams added.
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