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Alberta rakes in resource revenues Awash in petro dollars, province ended second quarter 2005-6 fiscal year on track for surplus of C$5.9 billion Gary Park Petroleum News Canadian Contributing Writer
The Alberta government has yet to find the money tree and is not known to be in the business of printing the stuff, but it may have come as close as any jurisdiction in the western world.
Awash in petro dollars, it has ended the second quarter of the 2005-6 fiscal year on track for a surplus of C$5.9 billion — C$4.4 billion more than it forecast in the spring budget — and would be aiming for C$8.7 billion if it hadn’t pumped an extra C$1.5 billion into its spending programs and decided to dole out C$1.4 billion to Alberta residents in C$400 a head “prosperity” checks that are the closest the province has ever come to Alaska’s annual dividends. Record resource revenues Finance Minister Shirley McClellan said the windfall stems mostly from oil and gas prices that have generated C$13.2 billion in resource revenues — the highest on record for Alberta.
Premier Ralph Klein shrugged off assertions from the rest of Canada that the largesse should be more widely distributed outside Alberta, arguing that his government is dependent on volatile commodities.
“It’s very hard to predict the price of oil or gas and no-one in their wildest dreams could have predicted that they would reach the heights they have,” he said.
Klein said Alberta once “got creamed” when it over-estimated resource revenues and ended up with a C$3 billion deficit.
“Now we’re being criticized for having too much money and that’s the criticism I sort of like.” US$1 increase equals C$100 million However, Alberta Liberal leader Kevin Taft said the Klein government is becoming too reliant on a single income source, when it should be deeply concerned about building a long-term economy.
He said Alberta is directing less than 15 percent of its revenues into endowments that might help ensure income in perpetuity.
New Democratic Pasty leader Brian Mason criticized the government for mailing out glossy brochures announcing the C$400 rebate checks before enabling legislation has been passed by the legislature, suggesting Klein thinks he governs by divine right.
The second half of the financial year is likely to swell the government vault even more.
Oil prices have averaged US$60 a barrel to this point of the fiscal year, 43 percent higher than the budget forecast, while natural gas is now projected to average C$8.50 per gigajoule, 52 percent above the budget target.
Every US$1 increase in a barrel of oil pumps an extra C$100 million into provincial coffers, while a 10 cents rise in gas prices also generate an additional C$100 million.
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