(Bloomberg) -- Alberta’s new United Conservative government is painting a gloomy picture of the province’s finances as it prepares to release its first budget in the coming months.
The government, in an abbreviated fiscal first-quarter report, highlighted the province’s rising debt levels and placed the blame on its center-left predecessor. Alberta’s total debt and public-private partnership liabilities are on track to reach C$119.5 billion ($90 billion) by the 2023-2024 fiscal year, up from C$80.8 billion in the year ended March, the government said Tuesday.
Premier Jason Kenney’s government released the report as it’s crafting its first budget since taking power in April, following a campaign in which it vowed to balance the province’s books in its first term. Finance Minister Travis Toews said on Tuesday that the government is working through an expert panel’s report on the province’s finances before releasing the budget. He reiterated the balanced budget promise, saying that Alberta will be entering a period of budgetary restraint despite already having the lowest relative debt levels among Canada’s provinces.
“When it comes to comparing debt-to-GDP relative to other provinces, while that’s of interest, the reality is I don’t want a race to the bottom,” Toews said in response to reporters’ questions. The province spent C$93 million more on debt-servicing costs last quarter, money that Toews said would be better spent on services for Albertans.
Alberta had net debt of about 7% of its gross domestic product, the lowest among Canada’s 10 provinces, according to the previous government’s most recent budget.
Alberta’s deficit in the quarter from April through June was C$835 million, down from C$1.2 billion in the same period a year earlier, according to Tuesday’s report. Expenses fell 2.5% to C$14.3 billion, driven by an 84% drop in spending on capital grants to cities. Many grants that would have been made earlier in the year were delayed into July because of the post-election government hand-off, and those expenditures will resurface in the current quarter’s figures, Toews said.
Revenue was little changed at C$13.4 billion last quarter, with increases in income tax and non-renewable resource revenue offset by drops in other taxes and revenues such as energy industry levies and Alberta Gaming, Liquor & Cannabis Commission income. Operating expenses in the quarter rose 2.2%, driven by physician compensation and drug costs.
The report didn’t include economic projections and other figures such releases typically include.