Canadian province ends fiscal year with sudden surplus for the first time in 7 years

Alberta Finance Minister Jason Nixon said Tuesday, June 22, that the final tally of the province's fiscal year 2021-22 budget, which ended March 31, showed a surplus — an excess of revenues over expenditures — of $3.9 billion CAD.

Last year, the budget of Alberta, the largest oil-producing region in Canada, was based on a projected income from oil sales at $46 CAD per barrel. However, this figure began to skyrocket as the pandemic ended and demand surged, and rose even more due to supply constraints following the Russian invasion.

Thus the average price of oil in Alberta reached $77 CAD per barrel, more than 1.5 times higher than expected. Initially, the ministry had anticipated an $18.2 billion CAD deficit in the budget. Later, after assessing the new geopolitical environment in February 2022, Alberta economists predicted a loss figure of $3.2 billion CAD. The reality exceeded their expectations.

Although it's an incredible win for the region — the first time in seven years that a fiscal year ends without a loss — Alberta's finance minister commented on the news cautiously, saying that the suddenly available funds should be invested wisely:

"I think we need to make sure at this point that we are using these resources strategically in the right way to help Alberta residents deal with the current issues, especially inflation and affordability. But we need to do it in a way that doesn't create a disruption for the future when oil and gas prices fall."

First of all, it was decided that $2 billion CAD would be allocated for current tasks in the region's economy, and the gas tax vacation could be extended until the end of the year if the province's revenues are as high.