Budget surplus gushes $1.5B over projections
The Edmonton Journal
Tue 27 Feb 2007
Page: A6

Section: News
Byline: Archie McLean
Dateline: EDMONTON
Source:
The Edmonton Journal; with files from the Calgary Herald

EDMONTON - Alberta is set to reap its second-highest
budget surplus, a $7-billion gusher driven by the continuing natural resource
boom.

The surplus is about $1.5 billion higher than was projected in November,
largely the result of high corporate income tax revenue and investment income,
Finance Minister Lyle Oberg said Monday.

Spending has actually dropped by $40 million over the same time period.

But that doesn't mean tax cuts are coming, said Oberg. The province has too
many urgent needs, he said.

"If you ask anyone in Calgary or Edmonton where they'd like their dollars to
be put towards -- whether it be taxes, roads, schools or hospitals -- a lot of
them would not say taxes."

The surplus announcement comes on the same day the C.D. Howe Institute, a
right-wing think-tank, released a report in which Alberta ranks as one of the
worst provinces for spending outside its budget -- nearly $14 billion over the
past decade.

"It's a huge number," C.D. Howe Institute president Bill Robson said. "The
real issue is: when there is a surprise on the revenue side, do they spend it?
And certainly in Alberta's case there's evidence that is so."

Last year's surplus, $8.7 billion, was the highest ever, and most of it was
spent, including $1.4 billion on $400 prosperity cheques for all Albertans.

Oberg says there will be no such cheques as long as he is finance minister.
The government will introduce a plan in the upcoming budget to deal with such
surpluses in the future, he said.

"For any potential unanticipated surpluses, there will be a formula so
everyone will know on a quarterly basis what exactly the dollars are going for."

The Liberals say they already have such a strategy. Finance critic Rick
Miller said any surplus revenue, as well as 30 per cent of all non-renewable
resource revenue, should be put into the Alberta Heritage Savings Trust Fund to
finance the province after its natural resources run out, Miller said.

"This is a government squandering our golden opportunity," said Miller. "What
we really need is prudent budgeting and fiscal discipline."

He said under the Liberal plan, Alberta would have $120 billion in the fund
by 2021. The fund is currently worth about $17 billion.

NDP critic Raj Pannu said the government should be using the cash to help
students, seniors and others who aren't directly benefitting from the boom.

"A high rate of economic growth does not automatically translate into
prosperity that is felt at the level of every household," said Pannu.

Despite its size, much of the province's surplus has already been spoken for.
About $2.4 billion will be going to the heritage fund, another $1.8 billion will
be spent on capital investments and the rest will go to the sustainabilitiy fund
meant to guard against a sudden drop in the energy market.

Saskatchewan announced its own projected surplus on Monday -- it will be $5.3
million, less than one-tenth of one per cent of Alberta's.

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Edition: Final
Story Type: Business
Length:
499 words