Last month, RBC released their federal and provincial fiscal tables, comparing the fiscal health of the budgets of the federal and provincial governments.
Here’s how Alberta fares.
For the current budget year (2020–21), Alberta has a deficit of $24.159 billion, the second largest deficit in the country, superseded by only Ontario, who is carrying $38.538 billion in deficit this year.
This is, by far, the largest deficit Alberta has seen since at least 1981–1982, which is when the RBC tables start. Last year’s budget—the first budget the UCP posted—was itself a deficit of $12.152 billion. It was the larger than any other provincial deficit, and it was larger than any deficit the provincial government carried during the NDP’s term.
Relative to GDP, this year’s budget balance is -8.1%, the lowest of all the province. Ontario, whose deficit was higher, has a balance relative to GDP of only -4.6%.
Alberta’s revenue is down 16.8% this year, compared to 2019-2020. Only Newfoundland and Labrador has a larger drop in revenue: 25.4%.
This is also the second largest drop in the last 4 decades. The largest drop in revenue was 27.7% in 1986–1987. The third largest drop was 14.1% in 2001–2002.
This also comes after a 6.8% drop in revenue last year, only the second time in the last 40 years that Alberta had two consecutive years of revenue declines. The only other time was under the NDP, when they saw drops of 13.9% and 0.8% in 2015–2015 and 2016–2017, respectively.
Alberta projects a revenue increase next year of 40.5%, which would be by far the largest increase since at least 1981. The next largest was 27% in 2000–2001.
Relative to GDP, Alberta’s revenue is 12.9% of GDP, the lowest of all the provinces. The next lowest is Ontario, at 17.8%. This is the lowest that Alberta’s revenue as a percentage of GDP has been since 1981. Alberta projects to be the lowest next year, at 17.0% and tied for the lowest with Ontario the following year, at 17.3%.
Alberta’s expenses are up 7.2%, putting it in 5th place among the provinces. BC, Ontario, Québec, and PEI all had expenses increase at greater rates than Alberta.
This is Alberta’s largest increase in expenses since it increased to 8.2% under the NDP in 2016–2017. However, unlike the NDP, who saw revenues fall only 0.8% that year, the UCP have seen revenues fall 16.8%, which is a significantly larger gap.
The UCP project expenses to drop by 10.6% next year. If they follow through with cutting a 10th of the provincial budget, this will be the largest cuts experienced by the province during the 40-year reporting period. The next largest cuts were when Ralph Klein cut 9.2% from the budget in 1994–1995. Granted, Klein also cut 4.6% from the previous year’s budget, 5.7% from the following budget, and 1.4% from the budget after that.
In the 2020–2021 budget year, the UCP spending is projected to be 21% of its GDP, the highest since 1992–1993 but the lowest of all the provinces.
Alberta’s net debt is at $68.875 billion this year, the third highest in the country (after Ontario and Québec) and the highest it’s been since at least 1981.
The UCP project dropping that to just above $47 billion next year and just under $47 billion the following year. Even then, it’ll still be third highest of all the provinces.
Last year’s net debt came in at $40.144 billion. The 4 years of the UCP’s first term (assuming that their projections for the next two years play out) are the only times in the last 40 years that Alberta’s net debt has been above $30 billion. The next largest was $27.7 billion under the NDP’s last year.
The province’s net debt to GDP ratio is 23.1%, which puts it at third lowest; only BC and Saskatchewan are lower, at 21.3% and 19.7%, respectively.
Its net debt per capita is $15,542, the third lowest of all the provinces, but the highest its been since the 1981–1982 reporting year. The next highest net debt per capita was just last year, when it was at $9,204 per person. The next two years, the UCP project net debt to be at $10,471 and $10,304 per person. The highest per capita amount under the NDP was $6,393.