BNN, the business news channel, ran an online poll Tuesday in advance of the latest fiscal update from Alberta: “Is Rachel Notley’s NDP government doing enough to reduce Alberta’s dependence on oil?” it asked. But by the time provincial finance minister Joe Ceci released the latest numbers hours later, it was clear that the question’s premise, which the NDP happens to share — that Alberta needs to rely less on oil revenues — need not be taken as a given. There weren’t many bright spots in the province’s financial update, but if one thing made it a bit less awful than it could have been, it was that oil and gas revenues are now projected to be considerably higher than the 2016 budget’s fairly gloomy outlook.
That’s largely due to the government increasing its projected average oil price from US$42 a barrel to US$45 a barrel, helping to boost resource revenues by $744 million. And with West Texas Intermediate trading Tuesday around US$47 a barrel, things could look even brighter for resource revenues come the next fiscal update. The catch is that it still won’t even come close to making up for the red ink splashed everywhere else around this fiscal update, most plainly in Notley government’s insistence on spending its way through the severest two-year economic contraction ever recorded in the province. And, less noticeably, in the plummeting of corporate tax revenues by nearly $900 million.