2013-14 Third Quarter Fiscal Update and Economic Statement - presentation by Doug Horner, President of Treasury Board and Minister of Finance - February 26, 2014

1. 2013-14 Third Quarter Fiscal Update
and Economic Statement
February 26, 2014

2. Overview
• Turning the corner – back in the black
Operational Deficit/Surplus – full year
Budget 2013
Q1
Q2


$451 M deficit $500 M deficit to $250 M deficit to
$250 M surplus $250 M surplus
Q3

$1.4 B surplus

3. Overview
• Proceeding with caution - revenues
remain volatile
• Turning the corner and continuing down
road set out in budget
• Spending taps will not open up
• Surplus to cushion future revenue drops

4. Economic Strength
Real Gross Domestic Product (GDP) Growth
Year-over-year % change
6
5.2
5
4
3.8
3.7
3.3
3
2
1
0
Alberta
Canada
USA

5. Economic Strength
Population
26.5%
11.1%
Alberta
Canada
Employment
Growth 2003-2013
27.6%
13.2%
Average number of jobs
added per month in 2013
Alberta
2,600
5,700
Rest of
Canada
Monthly employment growth Jan to Dec, 2013

6. Oil Price Differential
$110
100
$15
90
80
$10
$39
$37
70
60
50
Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13
WTI
WCS

7. 2013 Flood
$6B natural disaster event
Provincial support
• $1.2 B commitment for small businesses and
communities
• $537 M operating expense and $33 M in capital
spending to December 31

8. Booming Population

9. Alberta’s Finances
Operational Plan
Operational Operational
Deficit
Surplus
Operational Operational
Revenue
Revenue
(Q3 estimate)
(Q3 actual)
(Q3 estimate)
(Q3 actual)
($372 M)

$28.1 B

Operational Operational
Expense
Expense
(Q3 estimate)
$28.5 B
$1.2 B
Operational
Borrowing
(Q3 actual)

$29.6 B
$0
$30.8 B
Net Assets
Net Assets
(Budget 2013
estimate )
(Q3 revised
forecast)
$41.1 B
$43.9 B
Decrease of
$1.97 B
Decrease of
$335 M

10. Alberta’s Finances
Capital Plan
Capital
Spending
Capital
Spending
(Q3 actual)
Average
Borrowing
Cost
Heritage
Fund Rate
of Return
(Q3 estimate)
$ 3.45 B
$3.5 B
3.7%
11.6%
Debt
Servicing
Debt
Cap
0.6%
3%
(of operational revenue)

11. Alberta’s Finances
Savings Plan
Contingency Account
Contingency Account
(Budget 2013 estimate)
(Revised 2013-14 forecast)
$691 M

$4.6 B
Alberta Heritage
Savings Trust Fund
(Fair Value of Net Assets @ Q3)
$17.3 B

12. Stay tuned for Budget 2014
March 6
www.finance.alberta.ca
twitter.com/AB_TB_Finance