What Changed in Alberta from the Fall 2021 Mid-year Update to Budget 2022
— Published on May 12, 2022
- Alberta’s provincial government is experiencing a windfall from resource revenue. According to Budget 2022 (released February 24, 2022), total nominal revenue from 2021/22 through 2023/24 will be $17.0 billion higher than projected in the 2021-22 Mid-year Fiscal Update (released November 30, 2021) excluding COVID-related revenue. Of that increase, total nominal resource revenue accounts for $9.4 billion (or 55.3 percent).
- When resource revenue is relatively high, the provincial government faces added pressure to increase spending. Excluding COVID-related measures, Alberta’s Budget 2022 increased projected nominal program spending by $5.7 billion (over the three-year period) since the 2021 mid-year update.
- Some of the increase in total program spending can be explained by the expectation that inflation rates and population growth rates will be higher. Of the total $5.7 billion increase in total program spending, $1.7 billion or 30.5 percent can be explained by the expected higher rates of inflation and population growth.
- That means that $4.0 billion of the increase in program spending from mid-year 2021 to February’s Budget 2022 was above and beyond anything linked to changes in expected inflation or population growth.
- Put simply, the provincial government used higher revenues to increase spending at the expense of paying down debt, reducing taxes, or saving.
More from this study
Subscribe to the Fraser Institute
Get the latest news from the Fraser Institute on the latest research studies, news and events.