Alberta revels in oil, gas windfall of C$3.3 billion

Gary Park

Petroleum News Calgary correspondent

Awash in a tidal wave of oil and natural gas revenues, the Alberta government is set to notch a C$3.3 billion (US$2.5 billion) budget surplus for 2003-04 — triple its forecast last spring.

Finance Minister Pat Nelson reported that the sustained period of high commodity prices will generate petroleum royalties that are C$2.7 billion (US$2.03 billion) higher than projected.

When the year ends, Alberta is expected to tally overall revenues of C$25.3 billion (US$19 billion), while spending C$22 billion (US$16.5 billion), Premier Ralph Klein said.

“We’re in a healthy and enviable position, but notwithstanding that we have to keep an eye on our expenditures and be prudent in the way we spend money because it might not always be this rosy,” he said.

Nelson echoed those concerns, saying that although Alberta leads Canada in gross domestic product growth and has the lowest unemployment, the government must be frugal because it remains overly dependent on uncertain oil and gas revenues to support its services.

The Heritage Savings Trust Fund, Alberta’s version of the Alaska Permanent Fund, shook off three years of poor returns to grow nearly C$1.3 billion (US$975 million) to C$12.4 billion (US$9.3 billion).