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Tag: Nate Horner

Province updates projected revenues and debt

Alberta’s finance minister is forecasting a $2.4-billion surplus at the end of the government’s budget year next spring.

In a fiscal update Aug. 31, Nate Horner said strong and prudent fiscal management will help the province remain the economic engine of Canada.

“Alberta’s finances remain strong, and thanks to our new fiscal framework, our fiscal position is poised to become even stronger,” he said.

Despite an unprecedented fire season and ongoing economic volatility, the United Conservative government corrected an earlier surplus projection, increasing it by $94 million.

It has also adjusted its revenue stream, contained in the 2023 budget, from just over 70.6 million dollars to 71.1, a jump of almost $500,000. Strong  2022 personal income tax assessments and corporate profits are behind the rise.

Translated, that means more people and more companies in Alberta.

“We have population growth pegged at about 4.4 per cent right now. That’s a very high projection,” Horner acknowledged.

“I know that our economists in the department are having a hard time believing it, but it’s not only strong immigration but inter-provincial migration.

Part of the gain, the finance minister continued, is the influx of Ukrainian refugees to Alberta.

But, as the province welcomes new residents, Horner said he knows it brings with it other challenges like the current housing crunch and homes becoming less affordable.

“I think that it’s inevitable. We had an Alberta Calling campaign, leveraged our affordability to make people want to come and make a home in Alberta, and over time that’s changed,” he said.

 

Indoor and outdoor view of wedding venue — the Cowley Lions Campground Stockade near Pincher Creek in southwestern Alberta.

 

Horner believes things will rebound as new housing and communities are built up post-pandemic.

As it shares its latest projections for the current year, the province is also giving Albertans a glimpse into the future, anticipating a jump in corporate and personal income taxes in 2023-24 by $1.5 billion, $889 million of which is corporate.

Government economists are also predicting bitumen royalties will climb by $515 million during that same time frame but will be countered by an overall $694 million decline in overall resource revenue.

But, while highlighting many of the increases in expected revenues, the UCP government will also need to look at a growing deficit, forecast at $2.6 billion for the current year, and an overall debt reaching $77 billion, something Horner is aware of.

“When you pay down debt, the 2.6 billion that we’re going to use to pay down maturing principals, it’s going to save us 120 million going forward,” the finance minister said.

“If you notice in the report, at budget, our debt servicing cost was 2.85 billion and now it’s over three billion. That’s simply the effect of higher interest rates.”

That aside, however, Horner remains optimistic, even with the uncertainty surrounding interest rates.

The latest economic statement is forecasting a three per cent rise in the province’s real gross domestic product, a continued growing labour market deep into 2024, and an economy “well-positioned to withstand any challenges that arise.”

Yellow wheat field against darker sky

Local producers may see minimal benefit from ag tax credit

The province is eagerly promoting a tax credit for Alberta’s agricultural processing industry, but food producers in Pincher Creek and neighbouring MD will likely see marginal benefits, according to local government officials.

The initiative will spur the industry through a 12 per cent non-refundable tax credit on corporate investments in Alberta processing plants of $10 million or more, Agriculture Minister Nate Horner said at a press conference Feb. 8.

“At a higher level, this means that we’re not putting raw commodities in train cars and then shipping it away,” Horner said, taking aim at Alberta’s “competitor states” in Idaho, Colorado and Texas. 

 

 

Alberta farmers had the highest operating revenue in Canada in 2020, with processed exports hitting $6.4 billion the year before, according to Statistics Canada and the Government of Alberta. Raw exports, known as primary commodities, slumped by nearly 10 per cent in 2019, amounting to $5.3 for the year.

Agribusiness in the MD is driven by ranching and grain cropping for animal feed and seed oil, all of which are primary exports, Reeve Rick Lemire told Shootin’ the Breeze

“I’m not sure how (the tax credit) would benefit us,” Lemire said, noting that any bump to regional agri-processing could indirectly boost local production. 

 

Shelves of bottled liquor in an ad for Town & Country Liquor Store in Pincher Creek

 

Marie Everts, economic development officer at the Town of Pincher Creek, said on Feb. 10 that local food producers may not have the capital to invest $10 million in their farms or ranches. 

“There are obviously going to be places that will see more of a benefit,” Horner granted. The minister qualified that southwest Alberta ranchers can expect higher demand from the region’s beef processing hub in High River. 

Horner anticipates an immediate eight per cent return on investment to Alberta taxpayers on the one hand, and a healthy boost to provincial food security on the other.

 

Display of fall clothing at at Emerald & Ash Clothing in Crowsnest Pass.

 

Multimillion-dollar food processing plants can stay in business for between 40 and 50 years, he explained. 

Beef dominated Alberta’s agricultural exports in 2019 in terms of value, climbing 18 per cent year over year to hit $2.4 billion, the GOA reported in 2020. Ranchers, meanwhile, shouldered the province’s biggest share of agricultural operating expenses, shelling out $8.1 billion, or roughly 42 per cent of total farm expenses, according to Stats Can. 

Wheat was Alberta’s second-highest agricultural export in 2019, followed by canola seed, crude canola oil and live cattle. Annual wheat exports fell by 13 per cent in value and 10.5 per cent in quantity, according to the provincial government.