Alberta could finish the fiscal year in the black or close to it thanks to high oil prices, said Finance Minister Ron Liepert to a group of party faithful Wednesday morning.
In the 2011 budget, introduced more than a year ago, the government projected a $3.4 billion deficit, which had shrunk to $1.3 billion as of last month when the government presented its third quarter update. Liepert said the deficit for the current fiscal year, which ends March 31, could be erased entirely.
"It wouldn't surprise me that, come summer time when we do the year-end calculations, that it is a lot closer to balance than the amount projected in the budget," he said.
Liepert's comment came following a breakfast fundraiser for the Athabasca-Sturgeon Constituency Association. Liepert told a gathering of about 50 that he won't be surprised if the books are balanced when the finance department calculates its year-end final position in mid-summer.
"We are going to be pretty darn close," he said. "All you have to do is look at what oil prices have been doing for the past month and that has such a reverberating effect throughout our economy."
The $1.3 billion deficit in the government's last fiscal update assumed an average oil price of US$96.25 per barrel for the 2011 fiscal year. The actual realized average has been pushed up by a recent rise in the oil price, which is now close to US$107.
Scepticism
Alberta Liberal leader Raj Sherman, reacting to Liepert's most recent prediction, said the only reason the books aren't balanced is because the government has been badly managing the economy.
"With the price of oil today we should be balancing the budget. Even if it wasn't that high we should be balancing the books," he said. "If they are balancing it, with our plan we are going to have a surplus."
NDP leader Brian Mason was also sceptical of Liepert's projections.
"I put this down to trying to minimize the political black eye that the government has given itself by running a deficit in the richest province in Canada," he said.
The province is far too dependent on energy royalties, which leads to wild swings in revenue, he said.
"I think it is clear that they play craps with the budget every year because they are so dependent on royalty revenue and they have no control on the price of the commodities. They gamble every year with Albertans' budget," Mason said.
Alberta Party leader Glenn Taylor said the issue goes beyond this year or even next year's budget and toward a more profound problem with the way the government budgets.
"I don't know if Ron is right or not — I wasn't there to listen to his comments — but it doesn't get away from the challenge we have with the way this government is budgeting, so dependent on the price of oil," he said. "Albertans are looking for a long-term budget plan that weans us off the boom and bust economy."
Wildrose finance critic Rob Anderson said Liepert might be right, but the government should still have been more fiscally conservative.
"I think everyone hopes he is right, but at the end of the day it doesn't change the fact his projections are very rosy," he said. "Who doesn't hope that we have high oil prices and lot of revenues coming in, but the point is you can't run a budget on hopes and dreams."
Anderson said the 2012 budget especially was based on numbers that don't reflect reality.
Budget defended
In the 2012 budget the government estimated a deficit of about $900 million before returning to surpluses in subsequent years, largely through a growth in royalty revenues.
Liepert defended the 2012 estimates and said the government relies on the same projections as the business community.
"If you don't believe the numbers, don't be critical of me, be critical of those international forecasters that put out their estimates on the price of oil," he said.
Liepert, who is not seeking re-election in his Calgary riding, said he would gladly have defended his budget on the campaign trail.
In the coming provincial election, Liepert said people would be presented with a Conservative government with a vision for Alberta, as opposed to parties who he said were simply angry.
"I think there are some parties out there, that are emerging today, that I think are built on anger and that has worked for short periods of time, but it is never long-lasting," he said. "It is about what you stand for and not what you are against."
He also said his party was a team that will always welcome lots of viewpoints and ideas.
"Victory rarely comes because of one person and it sure won't come as the result of a small group masquerading as a team," he said.
