Final figures from 2020-21 show Alberta with $17B deficit, over $5B in COVID-19 costs

UCP releases fiscal update for Alberta The province updated the state of its finances Wednesday, and things could be looking up. CTV News Edmonton’s Dan Grummett has the details.

EDMONTON — The latest figures show Alberta's fight against COVID-19 cost more than $5 billion by the end of the last fiscal year in March.

The money went toward continuing care, hospitals, testing, vaccine distribution, personal protective equipment, and grants and aid for businesses and workers.

The numbers are part of the final report for 2020-21 delivered Wednesday by Finance Minister Travis Toews.

The year ended with a $17-billion deficit on $60 billion in spending.

But Toews noted that oil prices - critical to Alberta's bottom line - are rising in the short term and multiple economic forecasts predict Alberta will lead the nation in economic growth in the coming months.

“I don't want to sugar-coat our situation,” Toews said. “The global pandemic, great economic contraction, and the energy price collapse hit the Alberta economy disproportionately hard.

“But we've been doing all we can to position this province for economic recovery growth and based on what I see … I'm quite encouraged.”

On Thursday, Alberta lifts virtually all public health orders, the first in Canada to do so, with the goal of restoring its economy and society to pre-pandemic normalcy.

In the last 16 months, the province, supported by $1.8 billion in federal transfers, dedicated extra funds or temporarily delayed payments owed to get Albertans vaccinated and keep businesses from closing permanently.

The fiscal report says taxpayer-supported debt in Alberta sits at $93 billion. Some $2.5 billion a year is servicing the debt.

It says the pandemic bludgeoned Alberta's economy last year: real GDP fell by 8.2 per cent and unemployment rose to 11.4 per cent. Non-renewable resource revenue was about $3.1 billion, about $2 billion less than expected.

However, the benchmark crude price for West Texas Intermediate - projected in this year's budget to average US$46 a barrel - is sitting above US$66 a barrel.

Total revenue in 2020-21 was $43.1 billion. The deficit was almost $10 billion higher than had been predicted when the budget was tabled in early 2020. That factors in a $1.3-billion loss from Alberta's investment in the now-defunct Keystone XL pipeline project.

Alberta invested in the pipeline, which was to take oil from Alberta to the U.S. Gulf Coast, in early 2020 even as its future was in doubt. Democrat contender, now U.S. president, Joe Biden had said he would cancel the project if he won the presidency because it did not mesh with his goal of combating climate change. He did so on his first day in office.

Critics, including Alberta's Opposition NDP, called the investment irresponsibly risky, but Toews repeated his defence of it.

“That was a strategic, calculated decision recognizing that there was risk,” he said. “But the potential wealth creation from a KXL pipeline was so significant for this generation, and future generations of Albertans, the decision was warranted.”

The report also shows that total expenses for education were $8.3 billion, down $331 million from the original projection. The province said this was due to lower student enrolment and shifts to online classes during the pandemic.

NDP finance critic Shannon Phillips called it a misuse of public money.

“I know all of the students, staff, and families who are looking back at the terrible school year that just wrapped up will be outraged at the thought that the UCP withheld so many resources from the school system during the hardest year we've ever seen,” said Phillips.

“Think how much misery we could have spared Alberta families if this government had simply used the money they had already budgeted for education.”

This report by The Canadian Press was first published June 30, 2021.