Alberta is using a record windfall of resources to pay off $13.4 billion in debt

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Alberta’s United Conservative Party government is paying down the highest debt in the province’s history – $13.4 billion – thanks to a record increase in resource revenues.

Finance Minister Jason Nixon said the refund, as expected in Alberta’s first quarter update on Wednesday, shows his government’s commitment to fiscal discipline even when the Treasury is overflowing with cash. oil and gas.

This discipline consists in particular in not restoring the services cut via a suspension of indexation three years ago.

“We remain focused on using the surplus wisely, to benefit Albertans today and tomorrow,” Nixon said at a news conference.

“To pay down the debt and reduce the debt burden for every Albertan and build our provincial savings fund.

Alberta finance minister says surplus will pay down debt and reduce cost of living

In his first quarter fiscal update, Finance Minister Jason Nixon said the government’s projected $13.2 billion surplus will reduce Albertans’ debt, energy costs and income taxes.

Revenue from non-renewable sources like oil and natural gas is projected to reach $28.4 billion by the end of fiscal year 2022-23, up $14.6 billion from the budget. february.

The windfall allows the province to pay off $13.4 billion in debt owed this year without resorting to refinancing. The move will reduce Alberta’s projected debt from $93.1 billion to $79.8 billion by March 31, 2023.

The Kenney government is not using the windfall to restore benefits the province cut to get the province’s finances in order.

The government stopped indexing payments under the Income Assistance for the Severely Disabled (AISH) and Elderly Benefit programs to the rate of inflation in its first year of government.

Nixon said there were no plans to resume indexing because Alberta’s benefits are the most generous in the country. An eligible person who lives in their own home receives $1,685 from AISH each month.

Nixon did not explain why the government made this choice. Instead, he pointed to other measures the government has taken to lessen the impact of inflation without warming the economy.

“Our goal was not to provide affordable items that would make things worse for these people and for all Albertans,” he said. “So we’re focusing on discounts, removing taxes.”

“The Wrong Decision”

Kathleen Ganley, NDP MP for Calgary-Mountain View, said the government’s refusal to re-index AISH, seniors’ benefits and the child tax benefit is “just plain cruel”.

“We have a situation in this province right now where we have record revenues, where we have billions in surplus, and this government is allowing children, seniors and disabled Albertans to continue to struggle to pay for food,” Ganley said.

“And I think that’s absolutely the wrong decision and I think that’s cruel.”

Trish Bowman, CEO of Inclusion Alberta, said she felt “deep, deep disappointment” to hear the government had no plans to use any of its resource revenues to help people on AISH.

She said high inflation has eroded the value of monthly benefits, which have not increased since the last NDP government. Bowman said the province has promised to review indexing once Alberta’s finances are on track.

“One of the first groups of people you would consider trying to help are those who are living in sometimes desperate circumstances and already struggling,” she said. “So when there’s an opportunity to do something about it, hopefully that’s the kind of Alberta we live in.”

The government will resume adjusting personal income tax rates to the rate of inflation. The measure is retroactive to January 1, 2022. The basic amount of personal tax increases to $19,814. The amount will increase again in 2023. These measures mean an additional 80,000 to 95,000 Albertans will not have to pay provincial income tax in 2023.

Wednesday’s update confirms the $13.2 billion surplus forecast announced by Kenney on social media on Tuesday afternoon.

The Heritage Fund is getting a $2.9 billion boost thanks to a $1.7 billion surplus and $1.2 billion in revenue.

Currently, all of the fund’s investment income goes into general revenue. The government intends to change the legislation relating to the Alberta Heritage Trust Fund so that the $1.2 billion and future investment income can remain in the Heritage Fund.

Anyone hoping that the Alberta government will follow Saskatchewan’s lead in issuing cash payments to help reduce the cost of living will be disappointed.

The province says it has relieved people with the electricity rebate program, the elimination of the provincial fuel tax and the next natural gas rebates scheduled to begin in October.

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