Oil Revenues Send Alberta’s Budget Surplus Soaring

By Charles Kennedy - Dec 01, 2023

Revenues from the oil industry have pushed Alberta’s projected budget surplus for this year to twice as high as initially expected, at $4.1 billion, or C$5.5 billion.

In addition to revenue from oil royalties, the budget surplus for fiscal 2023/24 was pushed up by higher personal and corporate taxes.

“Alberta's economy is resilient, and our finances are on track,” Finance Minister Nate Horner told media, as quoted by the Canadian Press.

“Our energy sector continues to be a driver of jobs and activity, and at the same time we're seeing growth and diversification in emerging sectors like tech and aviation,” Horner also said.

The economy of the oil province is seen growing 2.8% this fiscal year, in line with original projections, but slower than growth over the last two years when Alberta was in recovery mode after the pandemic lockdowns.

Executives from the Canadian oil and gas industry, most of it concentrated in Alberta, this week traveled to the COP28 summit in Dubai in a bid to “contribute to the dialogue” on decarbonization, according to the president of the Canadian Association of Petroleum Producers, Lisa Baiton.

“We’re going there in a very constructive way to say, `We’re here, we’re a big source of emissions and we’re going to be a big part of the solution,”’ said the president of the Pathways Alliance, a grouping of oil sands producers, Kendall Dilling, as quoted by Global News.

While the industry executives discuss their efforts to reduce emissions, officials from the Canadian federal government are expected to announce a cap on emissions from the oil and gas industry at the same event.

The Trudeau government has been mulling such a cap over for at least two years but has so far stopped short of taking action on the idea. “If we don’t put in place the cap on oil and gas emissions, we can’t achieve our 2030 targets,” Environment Minister Steven Guilbeault told media this week.

By Charles Kennedy for Oilprice.com