Petroleum windfall fattens Alberta’s purse

Gary Park

Petroleum News Calgary correspondent

Fueled by higher than expected oil and natural gas revenues, the Alberta government is heading for another bonanza year.

At the mid-point of the 2003-04 fiscal year, the province is projecting a budget surplus of C$2.158 billion, plus another C$1.1 billion from late-arriving gas royalties from last year.

Finance Minister Pat Nelson said tax reductions remain an objective of the government, but for now C$2.5 billion will go into a new sustainability fund, created this year to protect Alberta against roller-coaster budget cycles and emergencies.

The balance of C$856 million will be divided between a capital fund and reducing Alberta’s remaining debt to C$4.2 billion.

The Heritage Savings Trust Fund — Alberta’s equivalent of the Alaska Permanent Fund — now stands at C$11.9 billion after strong markets contributed to a C$1.2 billion increase in the last six months.