A first quarter report comparing the 2019-20 three-month actuals to last year’s reinforces the need for spending restraint in order to balance Alberta’s books.
Actual revenue for April to June 2019 was virtually identical between the two years at $13.4 billion, while total expense was $364 million lower. Operating expense and debt servicing costs, a legacy of the previous administration, continued to increase as operating expenses grew $270 million and debt servicing increased $93 million.
“This Q1 report shows just how much work is needed to get Alberta back on track. Compared to Q1 last year, we are now paying an additional $93 million on debt servicing instead of on programs and services for Albertans. Burdened with cost pressures and compounding debt left by previous governments, we have to find ways to exercise restraint.”Travis Toews, President of Treasury Board and Minister of Finance
As the budget will be introduced this fall, the first quarter update only compares financial information from the first three months of 2019-20 to the first three months of 2018-19.
Other highlights include:
- Income tax revenue was $166 million higher this year, mainly due to growth in household income and corporate profits.
- Other tax revenue was $66 million lower, primarily due to the elimination of the carbon tax, and lower tobacco and fuel consumption.
- Resource revenue was $164 million higher mainly as the light-heavy oil price differential has been much narrower this year, mitigating lower actual oil prices.
- Total expense is $364 million lower this year. Operating expense is $270 million higher, while capital grant expense is $767 million lower.
- Debt servicing costs are up a net $93 million, mainly due to the increase in debt incurred last year, which requires tax dollars to be diverted from programs to pay for the resulting higher interest costs.