CALGARY, Alberta — A gusher of energy revenue has prompted Alberta to boost its budget surplus estimate by nearly 5 percent and plow more cash in the booming Canadian province into infrastructure, education and health.
In her first-quarter update for the 2006-2007 fiscal year Wednesday, Conservative Finance Minister Shirley McClellan said higher-than-expected oil and gas and income tax revenue has pushed the surplus forecast to nearly C$4.3 billion ($3.9 billion) from the C$4.1 billion estimate in the March budget.
It would be Alberta's 13th straight year of surplus budgets under Premier Ralph Klein. They were driven at first by deep cuts in public spending, then high oil and gas prices, which sparked heated development of oil sands and natural gas.
Klein, who is set to retire this year, has loosened the purse strings in recent years, allowing some of the wealth to flow to residents in the form of higher health and education spending as well as electricity rebates and dividend checks.
In the March budget, McClellan announced a three-year, C$13.3 billion spending plan for schools, highways and water treatment. She boosted that fund by C$1.8 billion Wednesday, adding money for medical equipment, public transit grants, government aircraft and cost inflation.
McClellan pointed out that Alberta's population jumped by 90,000 over the past year, putting a strain on infrastructure. Of the new money, C$711 million will be spent this year.
In the quarterly update, provincial revenue was forecast at C$34 billion, up from the previous projection of C$32.4 billion. Expenses are now pegged at C$29.7 billion, up from C$28.3 billion, due to higher funding for capital projects, disaster relief and natural gas rebates, the government said.
The government in the province of more than three million people is now banking on U.S. oil prices averaging $63.50 a barrel, up from the March assumption of $50. However, the Canadian wellhead natural gas price was cut to C$6.50 per thousand cubic feet, down from C$7.50, as North American markets weakened in the spring and summer.
The government said it increased spending on education by C$293 million and health care by C$262 million. It also established a C$200 million energy innovation fund to support energy development and efficiency as well as environmental protection.
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