Province Of Alberta 18-K/A Annual report (foreign governments) (amended)

Exhibit 99.6

GOVERNMENT OF ALBERTA

2022-23 Mid-year

Fiscal Update and

Economic Statement

NOVEMBER 2022

Table of Contents

2022-23 Mid-year Fiscal Plan Highlights	3
Revenue Highlights	4
Expense Highlights	6
Assets and Liabilities	8
Capital Plan	10
Economic Update	11
Fiscal Update Tables	23
Reporting Methodology and Legislative Compliance	35

Note: The 2022-23 Mid-year Fiscal Update and Economic Statement presents Ministry information on the organizational structure prior to the reorganization announced on October 24, 2022.

Note: Amounts presented in tables may not add to totals due to rounding.

Treasury Board and Finance, Government of Alberta

2022–23 Mid-year Fiscal Update and Economic Statement, November 2022

Additional copies of this report may be obtained by visiting our website at: www.alberta.ca/budget-documents.aspx

2 2022-23 Mid-year Fiscal Update and Economic Statement

2022-23 Mid-year Fiscal Plan Highlights

The Alberta government’s fiscal situation has improved substantially since the Budget 2022 forecast was developed. At that time there remained significant uncertainty with respect to global energy and financial markets. Russia’s invasion of Ukraine in late February propelled energy prices, which boosted activity in the energy sector. Although soaring commodity prices have resulted in increased revenue for the Alberta government, Alberta families and businesses are dealing with an affordability challenge due to significant inflation.

The 2022-23 surplus is now forecast to be $12.3 billion, up $11.8 billion from Budget 2022. This includes previously announced affordability measures, such as indexation of the personal income tax system, the fuel tax pause and utility rebates, and additional revenue and expense measures. These additional measures are reported in the mid-year forecast as expense provisions of $1.3 billion in 2022-23, $1.2 billion in 2023-24 and $0.3 billion in 2024-25.

Surpluses of $5.6 billion and $5.3 billion are forecast for 2023-24 and 2024-25, $4.7 billion and $4.6 billion more than the estimated in Budget 2022.

Alberta’s government remains committed to good financial management and fiscal prudence. Fiscal anchors, such as getting spending in-line with comparator provinces, continue to guide decision making for current and future taxpayers. While the mid-year forecast outlines an allocation for use of surplus cash over the next three years, primarily to repay taxpayer-supported debt as it matures and allocations to savings, decisions on these allocations and other uses of surplus cash have not been finalized.

The revenue forecast has improved dramatically in all three years. Revenue in 2022-23 is forecast at $76.9 billion, $14.3 billion higher than budget, with the majority of the increase from resource revenue. Revenue is $6.4 billion and $6 billion more than the budget estimates for 2023-24 and 2024-25 respectively. The West Texas Intermediate oil price has held above $85/bbl since mid-October but it continues to be

volatile. Oil prices are expected to soften over the three-year forecast but remain supportive of activity in the province.

Total expense has increased $2.5 billion from Budget 2022, with half of this due to adding the $1.3 billion provision for additional inflation relief measures. Other significant increases reflect higher costs of selling higher-priced and more volumes of oil, offset by higher revenue, funding for collective bargaining and the Alberta Medical Association agreements, and re-profiling of capital grants and the site rehabilitation program, the latter accelerated from 2023-24.

Capital Plan spending in 2022-23 has increased slightly mainly reflecting re-profiling of cash flows to align with project progress. The Capital Plan has increased by $0.1 billion in 2023-24 and by $0.6 billion in 2024-25 relative to Budget 2022 primarily for highway expansion twinning projects.

Taxpayer-supported debt is estimated at $79.8 billion on March 31, 2023. This is $10.3 billion less than the restated Budget 2022 forecast. For 2022-23, net debt to GDP is estimated at 9.9%.

Consolidated Fiscal Summary

(millions of dollars)	2021-22			2022-23						Change fr.			2023-24			2024-25
Statement of Operations	Actual			Budget			Forecast			Budget			Target			Target
1   Total Revenue		68,322			62,607			76,901			14,294			69,551			69,864
Expense
2           Operating expense (includes 2021-22 crude-by-rail expense)		49,531			50,800			51,976			1,176			52,784			54,026
3                 % change from prior year		6.2			2.6			4.9			—			1.6			2.4
4           Capital grants		1,554			2,148			2,236			88			2,316			2,735
5           Amortization / inventory consumption / loss on disposals		4,186			4,057			4,007			(50	)		4,136			4,210
6           Debt servicing costs		2,641			2,662			2,702			40			2,750			2,551
7           Pension provisions		(365	)		(289	)		(312	)		(23	)		(317	)		(325	)
8   Expense (before COVID-19 / Recovery Plan, Contingency)		57,547			59,380			60,609			1,229			61,669			63,197
COVID-19 / Recovery Plan:
9           Operating expense		2,812			687			1,360			673			149			153
10           Capital grants / inventory consumption (PPE)		949			281			452			171			168			148
11           Contingency for COVID-19 / Recovery Plan - unallocated		—			750			186			(564	)		—			—
12   Contingency / disaster and emergency assistance		3,076			1,000			700			(300	)		750			750
13   Provision for affordabilty initiatives		—			—			1,300			1,300			1,200			300
14   Total Expense		64,378			62,096			64,607			2,511			63,936			64,548
15   Surplus / Deficit		3,944			511			12,294			11,783			5,615			5,316
Capital Plan
16           Capital grants		2,503			2,429			2,520			91			2,484			2,883
17           Capital investment		4,119			5,105			5,093			(12	)		4,258			3,728
18   Total Capital Plan		6,622			7,534			7,614			80			6,742			6,610

2022-23 Mid-year Fiscal Update and Economic Statement 3

Revenue Highlights

Total Revenue

Total revenue is forecast at $76.9 billion in 2022-23, $14.3 billion higher than Budget 2022, and $1 billion more than the first quarter forecast. Revenue is forecast to drop $7.3 billion in 2023-24, to $69.6 billion, and to $69.9 billion in 2024-25, due mainly to declining resource revenue as energy prices recede from elevated levels. Total revenue is still $6.4 billion more than anticipated in 2023-24 and $6 billion in 2024-25, relative to Budget 2022.

Short-term energy investment was impacted by the COVID-19 pandemic and climate concerns, reducing oil and natural gas supply growth. As pandemic travel restrictions and other health measures were eased, global economic activity picked up and energy demand growth accelerated, putting upward pressure on prices. The February 2022 Russian invasion of Ukraine compounded this supply-demand growth imbalance, as nations began to impose sanctions on Russia, a major supplier of oil and gas, and prices spiked. The West Texas Intermediate oil price (WTI) reached over US$120 per barrel (/bbl) in June 2022. This, coupled with supply-chain issues and resurgence of

pandemic-restricted consumer demand, contributed to significant global inflation. This sparked interest rate hikes by central banks, which has weakened global economic prospects. Combined with ongoing pandemic lockdowns in China, the resulting lower industrial production has affected global demand, and reversed some of the boost in energy prices.

Despite some of these global headwinds, Alberta’s economic prospects remain solid, with energy and non-energy investment, oil and natural gas production, exports, and employment and population growth increasing. The forecast is based on real GDP growth of 4.8% in 2022, and then an average of 2.8% over the next three years to 2025.

Non-Renewable Resource Revenue

Non-renewable resource revenue (NRR) is forecast at $28.1 billion in 2022-23, $12 billion higher than in 2021-22 and $14.3 billion more than estimated in Budget 2022. NRR is forecast to decrease to $19.2 billion in 2023-24 and then to $16 billion in 2024-25, as energy prices trend down. Bitumen royalties now make up about 70% of resource revenue.

The West Texas Intermediate oil price is forecast at US$91.50 per barrel (/bbl) for 2022-23, $21.50 more than estimated in Budget 2022. WTI is estimated to drop to $78.50/bbl in 2023-24 and then to $73.50 in 2024-25, but this is still $9.50/bbl and $7/bbl more than the Budget 2022 estimates. The decreasing prices are based on slower demand growth due to global economic weakness, the impacts of inflation and increasing interest rates, and the uncertainty from the ongoing conflict in Ukraine, as well as to supply growth.

Bitumen royalties in 2022-23 are expected to be $19.4 billion, $9 billion higher than Budget 2022, and $7.7 billion more than in 2021-22. The substantial increase is due to the higher oil price from the tight global demand-supply balance and the war in Ukraine. More projects are moving to “post-payout” status, or will be doing so sooner, paying royalties on the higher net revenue formula in 2022-23 and subsequent years. The light-heavy oil price differential has widened recently and is forecast to average US$19.80/ bbl, $5.50 above budget, mainly due to lower demand arising from the release of heavy oil barrels from the US Strategic

Revenue	2021-22		2022-23				Change fr.			2023-24			2024-25
(millions of dollars)	Actual		Budget		Forecast		Budget			Target			Target
Personal income tax		13,335		13,382		13,299		(83	)		13,751			14,683
Corporate income tax		4,718		4,040		6,252		2,212			6,224			6,623
Education property tax		2,478		2,504		2,504		—			2,541			2,566
Other taxes		2,975		3,108		2,116		(992	)		2,924			3,251
Bitumen royalty		11,605		10,349		19,353		9,004			13,087			10,874
Other non-renewable resource revenue		4,565		3,491		8,771		5,280			6,102			5,094
Transfers from Government of Canada		11,595		12,054		12,487		433			11,524			12,291
Heritage / endowment funds		2,642		2,416		263		(2,153	)		1,293			2,261
Other investment income		937		757		932		175			1,039			1,097
Net income from Government Business Enterprises		4,810		2,435		2,475		40			2,657			2,422
Premiums, fees and licences		4,520		4,490		4,756		266			4,734			4,920
Other		4,142		3,581		3,693		112			3,675			3,782
Total Revenue		68,322		62,607		76,901		14,294			69,551			69,864
Change from Budget 2022 in 2023-24 and 2024-25:		Personal income tax									(691	)		(772	)
		Corporate income tax									1,707			1,727
		Other taxes (includes education property tax)									(313	)		(96	)
		Non-renewable resource revenue									6,861			5,052
		Transfers from Government of Canada									(117	)		396
		Investment income									(1,160	)		(341	)
		Net income from GBEs									27			(234	)
		Premiums, fees, licences and other revenue									103			281
		Total change from Budget 2022									6,417			6,013

4 2022-23 Mid-year Fiscal Update and Economic Statement

Petroleum Reserve and refinery outages. The differential remains wider than budget in the following two years but declines to US$16.10/bbl by 2024-25.

Conventional oil royalties have also increased by $2.3 billion to $4 billion in 2022-23, due to the forecast higher oil prices and an increase in expected production. The higher revenue continues in 2023-24 and 2024-25.

Natural gas and by-product royalties have also increased, by $2.8 billion in 2022-23, as natural gas and oil prices are higher (by-product prices follow oil prices) and also from increased production. Royalties decrease in the following two years as prices moderate.

Tax Revenue

Total tax revenue in 2022-23 is forecast at $24.2 billion, $1.1 billion higher than budget, but only $0.7 billion more than in 2021-22. The increase from budget is due to stronger corporate income tax (CIT) revenue, offset by lower fuel tax revenue from the fuel tax relief program and indexation of the personal income tax (PIT) system to inflation, both to help Albertans with the affordability challenges caused by high inflation.

PIT revenue is forecast at $13.3 billion, $83 million lower than estimated in Budget 2022. PIT revenue increases to $14.7 billion by 2024-25, with moderate growth in household income.

CIT revenue of $6.3 billion is forecast for 2022-23, the highest amount ever collected. This is $2.2 billion more than the budget estimate, reflecting strong corporate profits boosted by elevated commodity prices, exports and activity, and encouraged by the Job Creation Tax Cut. CIT revenue remains high, reaching $6.6 billion by 2024-25, but growth is modest as wages rise, companies continue to spend more investing in Alberta and energy prices decline.

Other tax revenue in 2022-23 is estimated at $4.6 billion, $992 million less than the $5.6 billion expected in Budget 2022, almost entirely due to the fuel tax relief program. Other tax revenue is forecast to recover to $5.8 billion by 2024-25 as fuel tax

revenue returns to “normal” levels. Revenue from insurance and tobacco taxes has been revised lower in all years as actual prior-year insurance tax revenue was lower than anticipated when budget forecasts were prepared, and as tobacco prices have increased, possibly inducing substitution with competing vaping and cannabis products.

Transfers from Government of Canada

Federal transfers of $12.5 billion are forecast for 2022-23, $433 million higher than estimated in Budget 2022. Main changes comprise: a $232 million special one-time bump to the Canada Health Transfer (CHT) for surgical backlog, a $50 million donation of personal protective equipment directly to Alberta Health Services, re-profiling of $279 million from 2023-24 for the site rehabilitation program, partially offset by re-profiling of federal infrastructure funds to match project progress.

Transfers are $117 million lower than budget in 2023-24, due mainly to moving the site rehabilitation revenue to 2022-23, partly offset by increased CHT and the Canada Social Transfer following upward revisions to Alberta’s share of the national population.

Investment Income

Investment income in 2022-23 is forecast at $1.2 billion, $2 billion lower than budget as financial markets have performed poorly with the global economic malaise, inflation, interest rate increases, ongoing supply chain problems and the war in Ukraine and its impact on Europe’s energy supply. All of the decrease is from the Heritage and endowment funds, with income from other accounts, funds and activities up slightly with the higher interest rates. Income is forecast to improve to $2.3 billion and then $3.4 billion in the following two years, based on markets returning to more “normal” rates of return.

Other Revenue

Net income from government business enterprises in 2022-23 is forecast at

$2.5 billion, $40 million more than budget, primarily due to lower losses from Alberta Petroleum Marketing Commission (APMC), partly offset by reduced ATB Financial net income (increased credit loss provision). Revenue in 2023-24 is up slightly from budget, with lower APMC net losses partly offset by lower Alberta Gaming, Liquor and Cannabis Commission (AGLC) gaming revenue due to higher costs (revised, accelerated amortization expense for gaming assets). In 2024-25, revenue is a net $234 million lower than budget, due to the higher ATB costs and APMC net losses, resulting from forecast declines in diesel prices and Sturgeon Refinery bi-annual maintenance.

Premiums, fees and licences revenue of $4.8 billion is forecast for 2022-23, an increase of $266 million from budget. Timber royalties and fees have increased $221 million from elevated lumber prices, and post-secondary tuition fee revenue has been more than estimated mainly due to higher student enrolments. In 2023-24 and 2024-25, revenue is $128 million and $184 million higher than budget due mainly to continued higher tuition fee revenue, revised estimates for land titles registrations and processing the backlog in 2023-24, and Alberta Health Services fee revenue in 2024-25.

Other revenue of $3.7 billion is up by $112 million from budget, mainly comprising $138 million in higher compliance payments and investment income in the Technology Innovation and Emissions Reduction Fund (TIER), partly offset by lower payments from automobile insurers for health care costs of accident victims, and lower volumes of fines and penalties. Revenue in 2023-24 is $25 million lower than budget, with higher external investment management charges to external clients (e.g. pension plans) more than offset by continued lower fines and penalties revenue, automobile insurance refunds and reduced TIER compliance payments. In 2024-25, revenue is $97 million higher, for similar reasons, except TIER compliance payments have increased.

2022-23 Mid-year Fiscal Update and Economic Statement 5

Expense Highlights

Total Expense

Total expense is forecast at $64.6 billion in 2022-23, $0.2 billion more than 2021-22 and $2.5 billion more than estimated in Budget 2022.

The increase from 2021-22 comprises: increases of $3.3 billion in “regular” operating expense, $0.6 billion in other expense and $1.3 billion added as a provision for affordability initiatives, partly offset by decreases of $2.4 billion in disaster assistance mainly for crop insurance payments, $1.8 billion in COVID-19 / recovery plan expense and $0.9 billion in crude-by-rail divestment.

The increase from budget consists of: increases of $1.2 billion in “regular” operating expense, including $0.3 billion for electricity rebates allocated from the contingency, $0.1 billion in capital grants and debt servicing costs, a net $0.3 billion in COVID-19 / Recovery Plan expense and $1.3 billion for the provision for affordability initiatives, partially offset by a net $0.1 billion decrease in other expense.

Increases of $1.7 billion in 2023-24 and $1.4 billion in 2024-25 reflect higher “regular” operating expense of $1 billion in 2023-24 and $1.2 billion in 2024-25, mainly due to physician compensation and other collective bargaining agreements, higher costs of selling oil and external investment management fees.

The 2023-24 increase also includes a provision for affordability initiatives of $1.2 billion, and decreases of $0.2 billion in capital grants and other expense, the former mainly from re-profiling, and $0.3 billion in COVID-19 /recovery expense, mainly due to the re-profiling of site rehabilitation expense to 2022-23.

The 2024-25 increase also includes a $0.3 billion affordability initiatives provision, $0.2 billion in capital grant re-profiling, amortization and other expense, and a net $0.3 billion decrease primarily in debt servicing costs.

Operating Expense (excluding COVID-19 / Recovery Plan)

Operating expense excluding COVID-19 / Recovery Plan) is forecast at $52 billion, a $1.2 billion increase from budget, mainly from:

• $12 million in Culture and Status of Women primarily for humanitarian aid to Ukraine.

• $64 million in Education comprising $50 million for the Alberta Teachers Association agreement, $19 million for school bus operators to help with rising fuel costs and $12 million for Ukrainian evacuee students, partly offset by $17 million for lower employer pension contributions and other reductions.

• $622 million in Energy, consisting of $308 million for higher costs of selling oil, $300 million for electricity rebates and $14 million in other increases.

• $97 million in Environment and Parks including $69 million for Technology, Innovation and Emissions Reduction fund initiatives, offset by higher revenue, and $28 million for other initiatives.

• $340 million for Health including $174 million for the Alberta Medical Association agreement, $126 million for other collective bargaining agreements, and $40 million for various other programs, including primary care nursing, resident physicians, homelessness, and the addictions and crisis hotline.

• $50 million for Justice and Solicitor General including $22 million for judicial compensation, $15 million for victims services, $6 million for legal aid and $7 million for various other initiatives.

• A net $16 million in other ministries including $4 million for Travel Alberta, $12 million for the aviation sector and a net $9 million for various other initiatives.

• These increases are partially offset by decreases of $16 million related to deferring support provided to

continuing care operators as resident accommodation charges were not increased as expected, and a net $10 million in various other ministries.

Capital Grants (excluding COVID-19 / Recovery Plan)

Capital grants excluding Recovery Plan grants, are forecast at $2.2 billion, a net increase of $88 million from budget, mainly for re-profiling of various federally-funded projects and new funding for the Alberta Petrochemicals Incentive Program.

Other Expense (excluding COVID-19 / Recovery Plan)

Amortization, inventory consumption, pension provision and disposal loss expense has decreased by $73 million, mainly due to revised amortization.

Debt servicing costs have increased by $40 million in 2022-23, as savings from debt repayment are offset by increased debt swap costs due to rising interest rates. In the two subsequent years, debt servicing costs trend down as taxpayer-supported debt repayment more than offsets increasing self-supported debt servicing costs.

COVID-19 / Recovery Plan Expense

Budget 2022 included a $750 million contingency for COVID-19 and Recovery Plan initiatives, and $968 million in operating and other expense. Total COVID-19 / Recovery Plan expense of $2 billion is now forecast for 2022-23, comprising $1.3 billion in operating expense, $284 million in capital grants, $168 million in inventory consumption, leaving $186 million remaining unallocated from the contingency.

Over the next two years, $618 million is estimated for COVID-19 / recovery plan expense, $325 million less than budget mainly from re-profiling of the site rehabilitation program to 2022-23.

6 2022-23 Mid-year Fiscal Update and Economic Statement

Changes in COVID-19 / Recovery Plan 2022-23 operating expense comprise:

• $8 million reprofiled from 2021-22 in Education to support the K-12 system manage learning disruption caused by the pandemic;

• $290 million in Energy, consisting of $279 million for re-profiled site rehabilitation from 2023-24, and $11 million for the mineral strategy;

• $375 million in Health: $134 million for continuing care; $95 million for acute care and entry screening; $51 million for testing and contact tracing; $27 million for vaccine distribution; $14 million for drugs and supplemental benefits; and $54 million for physician compensation and development, staffing, contracts and health operations.

Other COVID-19 / Recovery Plan expense is $171 million higher in 2022-23 primarily for inventory consumption of personal protective equipment, rapid test kits and other supplies.

Disaster and Emergency Assistance Contingency

The Budget 2022 contingency included $1 billion for disasters and emergency assistance, with $250 million added to address possible natural gas rebates. Mid-year allocations from the contingency include $300 million for electricity rebates, $116 million for wildfires and $1 million for flood costs.

Affordability Initiatives

Affordability continues to be a substantial concern for Albertans as prices for necessities including food, shelter and energy are steeply rising. Alberta’s government is providing an estimated $7 billion in affordability measures between 2021-22 and 2024-25. Initiatives include:

• Expense provisions of $2.8 billion over the three years 2022-23 to 2024-25 for additional revenue and expense measures.

• Pausing collection of the 13 cent/ litre provincial fuel tax in partial increments based on WTI prices, estimated to provide assistance to Albertans by reducing tax revenue by $1 billion in 2022-23 and $0.3 billion in 2023-24.

• Providing a $50 per month rebate on eligible electricity bills from July to December 2022. Three months of electricity rebates were included in 2021-22; another three months of rebates, at $300 million, were included in Budget 2022; the program has been extended for a further three months in 2022-23, adding another $300 million.

• Indexation of the personal income tax system is estimated to reduce revenue by $304 million in 2022-23, $676 million in 2023-24 and $980 million in 2024-25.

• $23 million for skills upgrading supports and for school bus operators to help with higher fuel costs.

• Natural gas and alternative fuel rebates for eligible Albertans, if natural gas prices exceed $6.50 per gigajoule between October 2022 and March 2023. Based on forecasts of natural gas prices and utility rates, the trigger price is not expected to be reached. No costs are included in the forecast.

Total Expense	2021-22			2022-23						Change fr.			2023-24			2024-25
(millions of dollars)	Actual			Budget			Forecast			Budget			Target			Target
Operating expense (includes 2021-22 crude-by-rail expense)		49,531			50,800			51,976			1,176			52,784			54,026
Capital grants		2,118			2,148			2,236			88			2,316			2,735
Amortization / loss on disposals		2,595			2,840			2,791			(49	)		2,886			2,934
Inventory consumption		1,027			1,217			1,216			(1	)		1,250			1,276
Debt servicing costs		2,641			2,662			2,702			40			2,750			2,551
Pension provisions		(365	)		(289	)		(312	)		(23	)		(317	)		(325	)
Expense (before COVID-19 / Recovery Plan, Contingency)		57,547			59,380			60,609			1,229			61,669			63,197
COVID-19 / Recovery Plan:
Operating expense:
Energy		318			310			600			290			12			16
Health		1,528			10			385			375			—			—
Other ministries		966			367			375			8			137			137
Contingency – COVID-19 / Recovery Plan – unallocated		—			750			186			(564	)		—			—
Capital grants		385			281			284			3			168			148
Inventory consumption (personal protective equipment)		564			—			168			168			—			—
Total COVID-19 / Recovery Plan		3,761			1,718			1,998			280			317			301
Contingency / disaster and emergency assistance - allocated		3,076			—			117			117			—			—
Contingency / disaster and emergency assistance - unallocated		—			1,000			583			(417	)		750			750
Provision for affordability initiatives		—			—			1,300			1,300			1,200			300
Total Expense		64,378			62,096			64,607			2,511			63,936			64,548

2022-23 Mid-year Fiscal Update and Economic Statement 7

Assets and Liabilities

Financial assets of $76.3 billion are forecast for March 31, 2023, a decrease of $1.8 billion from March 31, 2022.

• Assets of the Heritage, endowment and other funds are $1.3 billion higher. The Heritage Fund is expected to retain all 2022-23 net income of $125 million, and $1.2 billion from 2021-22 net income above the inflation-proofing of $705 million already retained, pending legislative changes. Endowment fund net income is slightly lower than the withdrawals made annually for research and scholarships.

• Assets from self-supporting lending activities (Agriculture Financial Services Corporation - AFSC; local authority lending) are increasing by $644 million from 2021-22, reflecting growth in AFSC’s crop insurance fund after the large withdrawal in 2021-22, and local authority lending.

• Significant cash from surpluses over the next three years is available for debt repayment or savings.

The forecast assumes significant allocations to debt repayment and a portion for savings in all years, though this interim allocation is still being evaluated. The amounts being accumulated are estimated at $5.8 billion on March 31, 2023, falling to $2.4 billion by year-end 2025 with assumed debt repayment.

• Government business enterprise (GBE) net equity has increased by $191 million, primarily from improved ATB Financial net income, offset partially by net losses of the Alberta Petroleum Marketing Commission (APMC). GBE equity continues to increase in 2023-24 and 2024-25, primarily from ATB as APMC net losses increase in 2024-25 due to scheduled refinery maintenance outages that year.

• Other financial assets have decreased a net $0.9 billion from 2021-22.

Liabilities are forecast at $122.3 billion, $12.7 billion lower than they were on March 31, 2022.

• Taxpayer-supported debt is estimated at $79.8 billion on March 31, 2023, a $13.3 billion reduction from year-end 2022, due to significant debt repayment. Capital Plan borrowing and P3 liabilities, less principal repayments, have decreased $1.6 billion, while Fiscal Plan debt is $11.7 billion lower. Taxpayer-supported debt is estimated to decline a further $8.4 billion by 2024-25, to $71.4 billion based on the interim allocation assumptions in the mid-year report.

• Debt issued to finance loans to local authorities and for AFSC has increased $345 million.

• Government obligations for pension plan liabilities are $312 million lower, mainly from improved valuations for the pre-1992 Teachers’ Pension Plan. Other liabilities have increased by $519 million.

	At March 31
Balance Sheet Summary a	2022			2023						2024			2025
(millions of dollars)	Actual			Budget			Forecast			Target			Target
Financial Assets
Heritage Fund, endowments and other funds		22,176			22,982			23,445			24,443			26,404
Self-supporting lending organizations / activities		18,381			19,200			19,025			19,403			19,800
Cash available for allocation to debt repayment / savings		8,858			3,617			5,848			2,203			2,442
Equity in commercial enterprises		1,766			1,907			1,957			2,299			2,403
Other financial assets		26,945			26,923			26,047			25,163			25,773
Total Financial Assets		78,126			74,629			76,322			73,511			76,822
Liabilities
Taxpayer-supported Capital Plan borrowing / liabilities (P3s)		47,529			46,166			45,917			43,960			43,888
Taxpayer-supported Fiscal Plan borrowing		45,595			43,992			33,909			29,230			27,549
Total taxpayer-supported debt / liabilities		93,124			90,158			79,826			73,190			71,437
Self-supporting lending organization / activity debt		17,028			17,186			17,373			17,524			17,512
Total debt		110,152			107,344			97,199			90,714			88,949
Pension liabilities		8,271			7,982			7,959			7,642			7,317
Other liabilities (including SUCH sector, coal phase-out payments)		16,669			17,314			17,188			16,334			16,677
Total Liabilities		135,092			132,640			122,346			114,690			112,943
Net Financial Assets / (Debt)		(56,966	)		(58,011	)		(46,024	)		(41,179	)		(36,121	)
Capital / Other Non-financial Assets		58,576			60,271			60,090			60,960			61,251
Spent deferred capital contributions		(3,523	)		(3,662	)		(3,685	)		(3,785	)		(3,818	)
Net Assets		(1,913	)		(1,402	)		10,381			15,996			21,312

^a  2023 Budget, and 2024 and 2025 Target numbers have been restated to reflect 2021-22 Actual results.

8 2022-23 Mid-year Fiscal Update and Economic Statement

Net financial debt (financial assets less liabilities) is estimated at $46 billion for March 31, 2023, $10.9 billion less than on March 31, 2022, essentially reflecting the taxpayer-supported debt repayment. Net debt to GDP (2022 forecast) ratio is estimated at 9.9%.

Capital, non-financial assets less spent deferred capital contributions, are forecast to increase $1.5 billion to $60.1 billion, mainly displaying the difference between capital asset acquisition (capital investment less a 10% contingency), and depreciation (amortization expense). The annual change in capital and non-financial assets is expected taper off with reduced capital investment and increasing amortization.

Net assets of $10.4 billion are forecast for March 31, 2023, an improvement of $12.3 billion from 2022 reflecting the 2022-23 surplus. Net assets are estimated to continuing increasing, to $21.3 billion by 2024-25, based on surpluses of $5.6 billion and $5.3 billion over the two years.

Cash Available for Allocation

The surplus reported is based on consolidated accrual accounting standards and differs from cash available for government decisions. The main differences relate to how accounting standards define revenue and expense for reporting purposes, transfers not reported on the income statement, or the reporting of results of various entities on a consolidated basis.

• The net income of various funds and entities is included in the consolidated government surplus, but these entities retain their net income (or fund any losses). Some examples are ATB Financial, Agriculture Financial Services Corporation, the Heritage and endowment funds, or Alberta Petroeum Marketing Commission. The various entities are forecast to keep a net $2 billion of the consolidated surplus in 2022-23.

• Accounting standards require reporting revenue and expense as it is earned or becomes owed, which can often be quite different from when cash is received or actually spent.

• Acquisition of assets requires cash, but since the assets benefit Albertans for numerous years, their costs are included in expense over time instead of when they are initially built or acquired.

• Lending cash creates an alternative loan-receivable asset, which will normally be repaid, so is not included in expense when lent, nor in revenue when repaid.

Interim Cash Allocations

The significant surpluses being forecast over the next three years have been allocated to repayment of maturing debt and to savings in the 2022-23 mid-year report, but these are only interim allocations. As reported in the 2022-23 first quarter report, the use of surplus cash will continue to be evaluated as the year unfolds. The merits of reducing debt and debt servicing costs relative to increasing savings and investment income will be contemplated. The challenges faced by Albertans during these difficult inflationary times is also a major consideration. And the long-term economic and quality of life benefits of developing and building strategic infrastructure is another option. The government will thoughtfully analyze these various uses of surplus cash, and make decisions that meet Albertans’ priorities.

Cash Available / Interim Allocation to Debt Repayment and Savings

(millions of dollars)

	2022-23			2023-24			2024-25
(Negative = cash requirement; positive = cash source)	Forecast			Target			Target
1   Current-year surplus		12,294			5,615			5,316
Cash adjustments:
Retained income of funds and agencies:
2   ATB Financial		(288	)		(316	)		(331	)
3   AFSC		(389	)		(455	)		(531	)
4   Heritage / endowment funds		(1,222	)		(1,001	)		(1,892	)
5   APMC		254			137			381
6   Other		(383	)		(336	)		(338	)
Capital cash adjustments
7   Capital investment not In expense (excl. SUCH)		(4,275	)		(3,624	)		(3,186	)
8   Amortization expense of capital assets (excl. SUCH)		1,256			1,332			1,418
Other cash adjustments:
9   Student loans		(555	)		(543	)		(544	)
10   Royalty revenue reported versus cash received		1,639			775			860
11   Pension provision (decreases liability, no cash outlay		(312	)		(317	)		(325	)
12   Other cash adjustments:		2,325			1,788			1,092
13 Current-year surplus cash (total of rows 1 to 12)		10,344			3,055			1,920
14 Prior-year surplus cash		8,858			—			—
15 Total cash available for allocation		19,202			3,055			1,920
Interim allocation:
16   Debt repayment		13,354			2,314			1,440
17   Savings / future-year debt repayment		5,848			741			480
18 Total interim allocation		19,202			3,055			1,920

2022-23 Mid-year Fiscal Update and Economic Statement 9

Capital Plan

The three-year Capital Plan has increased by $785 million from Budget 2022, to $21 billion, with $117 million more in capital grants and $668 million in capital investment. The $21 billion includes $7.6 billion in 2022-23, $6.7 billion in 2023-24 and $6.6 billion in 2024-25, which reflect increases from budget of $80 million, $111 million and $594 million respectively.

Funding provided to municipalities for infrastructure support represents the largest component of the three-year Capital Plan, at about one-third. Capital maintenance and renewal is the second largest envelope, over 15% of the Plan, as the government has continued investment in protecting and extending the life of existing assets. The third largest portion of the Capital Plan is support provided for health facilities and equipment. Funding to these three enevelopes comprises over half of the 2022-25 three-year Capital Plan.

Overall, the increase to the Capital Plan comprises a net $137 million for re-profiling and carrying-forward of unspent funds from 2021-22, due to updated project cash-flows, $50 million in federally-funded programs and donations, a net $40 million in transfers from operating expense, $510 million to

support new and existing projects, $51 million in SUCH sector self-financed spending, offset by $3 million in savings.

Factors affecting project progress include project scope, land conditions, delays due to weather, contract issues, recent supply chain disruptions and labour shortages.

Significant re-profiling relates to various roads and bridges projects including the Edmonton and Calgary LRT projects and the Yellowhead trail project.

The net increase of $50 million from federal programs and donations is primarily for the Foothills Medical Centre neonatal intensive care unit and Rockyview General Hospital gastrointestinal clinic expansion.

Net transfers of $40 million from operating expense are primarily for health system capacity and the Alberta at Work Targeted Enrolment Expansion Initiative.

$510 million in new and existing projects include:

• $297 million for highway expansion and interchange projects, such as Deerfoot Trail, Highway 40 twinning south of Grande Prairie, and the Highway 2 interchange project in Leduc;

• $70 million to address the homeless and addiction crisis;

• $62 million in health facilities, surgical recovery plan and IT support to improve the flow of patients in and out of the acute care system and address the surgical backlog;

• $32 million to support the Alberta Petrochemicals Incentive Program;

• $20 million for fish hatcheries facilities;

• $9 million for Mount Royal University Aviation Program Expansion;

• $5 million for a Natural Gas Pipeline in partnership with First Nations Reserves;

• $15 million in other funding primarily for culture and sports, equipment and school facilities.

SUCH sector self-financed spending has also increased by $51 million over the next three years.

Capital Plan Summary	2021-22		2022-23				2023-24		2024-25		3-year
(millions of dollars)	Actual		Budget		Forecast		Target		Target		Total
Municipal infrastructure support		2,168		1,809		1,824		1,749		2,244		5,817
Capital maintenance and renewal		1,151		1,252		1,310		1,040		945		3,295
Protect quality health care		597		783		703		737		851		2,291
Roads and bridges		687		789		928		782		583		2,294
Renewing education infrastructure		521		744		639		478		343		1,460
Streamlining service delivery		246		490		519		464		379		1,361
Public safety and emergency services		242		342		324		273		165		762
Agriculture and natural resources		166		172		188		303		318		809
Family, social supports and housing		85		96		98		95		112		305
Skills for jobs		85		100		103		64		63		230
Sports and recreation		47		144		158		122		65		345
SUCH sector self-financed (schools, universities, colleges, health entities)		627		811		821		634		543		1,998
Total Capital Plan		6,622		7,534		7,614		6,742		6,610		20,966

10 2022-23 Mid-year Fiscal Update and Economic Statement

2022-23

Economic Update

2022-23 to 2024-25

2022-23 Mid-year Fiscal Update and Economic Statement 11

Economic Update

Overview

Alberta economic prospects remain solid, but risks are increasing. Persistently high inflation, aggressive interest rate hikes around the world and ongoing geopolitical uncertainty are slowing the momentum in the global economy. Commodity prices have retreated from elevated levels seen earlier this year amid heightened concerns of a global recession. Even so, Alberta’s economy is positioned well to weather the challenges. Oil prices have softened but remain robust, boosting revenues and activity in the energy sector. Exceptional growth in non-energy business output has also bolstered export revenues and corporate profits, while investment intentions continue to be strong. Alberta’s housing market is faring much better compared with the rest of the country, buoyed by solid migration and low inventories. The Alberta Activity Index, a measure of provincial economic activity, is up 6% so far this year.

After rebounding 4.8% in 2021, Alberta’s real gross domestic product (GDP) is now forecast to grow 4.8% this year (Chart 1). This is down 0.1 of a percentage point and 0.6 percentage points from the first quarter and budget, respectively. The downgrade reflects weaker sentiment and softer consumer spending as a result of faster interest rate hikes, persistently high inflation and lagging wage growth. Weaker renovation spending and a pullback in resale housing activity are also weighing on residential investment, although housing starts have remained strong. Despite softer growth, real GDP is set to fully recover from the COVID-19 downturn and surpass the 2014 peak this year. At the same time, incomes in the province remain strong and will support provincial government revenues. Nominal GDP – a broad measure of income – is forecast to grow 24% in 2022, buoyed by record high corporate profits and solid household income growth (Chart 2).

Alberta’s real GDP growth is forecast to moderate to 2.7% next year but will fare better compared with the rest of the country. The completion of the Trans Mountain Pipeline expansion (TMX) expansion in late 2023 along with solid oil prices are expected to support activity in the energy sector.

Non-energy business investment will also be buoyed by large-scale projects in clean technology, renewable power and other emerging sectors. However, growth in consumer spending and residential investment are expected to slow further as higher interest rates work their way through the economy and pent-up demand for services fades. Over the medium term, the Alberta economy is expected to grow at around 2.9%. Solid fundamentals – including a strong population growth, relatively young population, lower cost of living and high wages – will support Alberta’s expansion in the coming years.

Global prospects weaken

Ongoing geopolitical uncertainty, persistently high inflation and aggressive interest rate hikes around the world are creating significant headwinds for the global economy. Central banks around the world – including the U.S., Canada and Europe – have increased their policy rates at a rapid pace in order to bring down inflation. The Bank of Canada, in particular, has increased the overnight target rate by 350 basis points since March 2022, the fastest pace in history. The overnight target rate is forecast to rise further to reach 4% by the end of this year, the highest level since 2008.

Chart 1: Real GDP growth to moderate but remain solid next year

Contribution to annual change in Alberta real GDP by expenditure

Sources: Statistics Canada and Alberta Treasury Board and Finance; e-estimate, f-forecast

* Includes total household, business, and government spending.

Chart 2: Incomes surge higher

Change in Alberta nominal GDP, corporate profits and household income, 2022

Source: Alberta Treasury Board and Finance

12 2022-23 Mid-year Fiscal Update and Economic Statement

While tighter financial conditions are beginning to slow demand in the Canadian economy, the labour market continues to be resilient. Employment grew in the last two months and the unemployment rate is still hovering at record lows.

The global wave of aggressive monetary tightening has contributed to a sharp deterioration in sentiment and raised concerns about a recession in the global economy. This, in turn, has led to sharp declines in asset and commodity prices in recent months. There are also signs that global economic activity has begun to slow. The global composite PMI output index contracted for the third consecutive month in October, with activity declining in both manufacturing and service sectors.

Oil prices strong despite pullback

Oil prices have softened from the record highs seen earlier this year, but tight market conditions are keeping prices at robust levels. Global petroleum demand has weakened due to slowing industrial production, rolling lockdowns in China, as well as lower-than-expected U.S. gasoline consumption throughout the summer this year. The announcement by OPEC+ in October to cut their production target by two million barrels per day (bpd) starting in November led to a partial rebound in West Texas Intermediate (WTI), although rising fears of a global recession continue to weigh on prices. Ongoing geopolitical developments will also continue to keep oil prices volatile in the near term.

WTI is now forecast to average US$91.50/bbl in 2022-23, US$1.00/ bbl lower than the first quarter update but still well above budget expectations. The slight downward revision reflects expectations of a slowdown in global growth next year, which is anticipated to dampen petroleum demand and prices. Even so, global oil supply-demand balance will remain tight and provide support to prices. As a result, WTI is forecast to be significantly higher than budget, averaging US$78.50/bbl in 2023-24 and US$73.50/bbl in 2024-25 (Chart 3).

Alberta prices under pressure

The discount between WTI and Western Canadian Select (WCS) oil price has widened significantly in recent months. While there is sufficient egress from the province, the combination of planned and unplanned refinery outages in the U.S., the release of heavy oil barrels from the U.S. Strategic Petroleum Reserve (SPR) and rebound in Western Canadian oil production has pushed the light-heavy differential to above US$25/ bbl since October. A global glut of high sulphur fuel oil, due in part to increased flows of Russian residual fuel oil to Asia, is also weighing on refinery demand for Alberta’s heavy oil in the U.S. Gulf Coast. The differential is now forecast to average US$19.80/bbl for 2022-23, up $0.60/bbl from the first quarter and $5.50/bbl higher than budget.

Over the medium term, the WTI-WCS differential is forecast to narrow to US$18.10/bbl in 2023-24 as some of the transient factors fade. Export capacity additions from the completion of TMX in late 2023 should lead to further improvement to US$16.10/bbl in 2024-25. Despite the normalization, stronger oil production, and thus pipeline throughput, is expected to push the differential above levels forecast at budget.

Despite a wider differential, strong global oil prices and a lower Canadian dollar are expected to buoy WCS prices. WCS is forecast to average C$94.70/ bbl in 2022-23, surpassing the 2013-14 peak, before moderating to C$73.30/bbl by 2024-25. With the recent weakness in the Loonie, the Canadian dollar is now forecast to average US¢75.20/Cdn$ in 2022-23, down from expectations in first quarter and budget, before slowly rising to US¢78.20/Cdn$ by 2024-25.

The price of western Canadian natural gas has also displayed increased volatility in recent months due to pipeline restrictions and robust production levels. Maintenance on both the Nova Gas Transmission Line (NGTL) and West Coast pipelines have temporarily restricted export flows from the province, resulting in wide swings in the AECO price. In contrast, natural gas prices in the U.S. have been comparatively steady and elevated, which is pushing up the cost of processing high sulphur crude such as Alberta’s heavy oil. The Alberta Reference Price (ARP) is expected to average C$5.40/GJ in 2022-23, down slightly from first quarter but still well above budget. Natural gas prices are expected to remain above pre-pandemic levels on the back of rising demand, with ARP averaging C$4.40/GJ in 2023-24 and $3.80/GJ in 2024-25.

Chart 3: Tight global oil market to buoy prices

West Texas Intermediate

Sources: Reuters and Alberta Treasury Board and Finance; f-forecast

2022-23 Mid-year Fiscal Update and Economic Statement 13

Non-energy exports remain high

Non-energy business output has grown at an exceptionally strong pace so far this year, although it is expected to ease in 2023 in line with a slowdown in the global economy. While manufacturing sales have retreated from recent peaks on the back of declines in petroleum & coal products and durable goods manufacturing, they are still up more than 30% year-to-date. The value of non-energy goods exports has also moderated, weighed down by lower exports of basic & industrial chemicals, as well as forestry and building products. These have been partly offset by a rebound in farm, fishing and intermediate food products, which has surged in recent months due to higher export volumes of wheat. The bounce back comes after depleted inventories and last year’s dry weather conditions weighed on crop exports in the first half of this year. Despite the recent pullback, the value of non-energy exports is still up nearly 14% so far this year.

With the slowdown in the global economy, growth in manufacturing and service exports is expected to decelerate and dampen non-energy exports in 2023, although this will be partly cushioned by a weaker Canadian dollar. Overall, real exports are forecast to grow around 4% next year before moderating to 3% over the medium term.

Solid oil and gas investment

Energy sector revenues and activity remain strong despite the volatility in prices. Oil and gas producers are drilling wells at a pace not seen since 2014, although ongoing labour and material shortages are restraining activity. Strong drilling activity has lifted conventional oil production by 12% year-to-date, while natural gas output is up 4%. Oil sands production has also rebounded to near all-time highs following maintenance-related disruptions in the spring. While producers are spending significantly more compared to last year, they are reinvesting a much smaller share of their cash flow into expanding production. They continue to focus on paying down debt to improve their balance sheets and increasing shareholder returns after many years of struggling

with weak prices and market access constraints. Oil and gas investment is forecast to grow 35% (or more than $8 billion) this year, led by the conventional sector (Chart 4). The increase in spending also reflects higher input costs.

Energy investment is forecast to rise over the medium term, growing $5.9 billion (or 18%) in 2023 and $3.8 billion (or 9.9%) in 2024. While oil prices are anticipated to moderate from this year’s elevated levels, they will remain supportive of activity. Producers are expected to ramp up drilling and production ahead of TMX coming online in late 2023. Even so, they are expected to maintain capital discipline in expanding production and continue to invest in emissions reduction initiatives.

Non-energy investment to gain momentum

Outside of oil and gas extraction, construction projects are proceeding despite higher costs. A strong expansion in the warehousing sector has propelled spending in commercial building construction this year, while ongoing projects in renewable energy, utilities and pipeline transportation are boosting investment in machinery & equipment and engineering construction. Non-energy investment is forecast to grow $2.9 billion (or around 10%) in 2022, reflecting increased activity and soaring construction costs.

Non-energy investment is anticipated to grow further by around 9% in 2023 and around 7% over the medium term. Cost pressures are expected to ease in the next few years. Activity will be boosted by spending on clean technology, which is poised to gain traction on the back of Alberta’s competitive taxes, stable regulatory environment, and access to abundant, resilient and low-cost natural resources. Air Products is set to build a $1.6-billion new net-zero hydrogen energy complex in Alberta’s Industrial Heartland. This landmark hydrogen production and liquefaction facility is expected to create 2,500 construction jobs and 30 permanent jobs once it becomes operational in 2024. A number of large-scale investment projects that will use hydrogen for industrial processes and power generation were also announced over the past year, providing significant potential upside to investment. These include Dow Chemicals $10 billion net-zero emissions ethylene and derivatives facility and Northern Petrochemical Corporation’s $2.5 billion carbon-neutral ammonia and methanol production facility.

Strong migration lifts population growth

After gaining momentum in the last year, Alberta’s population growth is expected to remain robust with higher levels of net migration. Alberta’s population grew 2.2% in the 2022

Chart 4: Business investment continues to advance

Change in Alberta non-residential investment by component

Sources: Statistics Canada and Alberta Treasury Board and Finance; f-forecast

14 2022-23 Mid-year Fiscal Update and Economic Statement

census year, a dramatic turnaround from 0.6% growth in 2021 and the highest rate since 2014. Population growth started picking up in the second quarter, propelled by net international migration which saw its strongest quarterly level on record. Alberta also welcomed nearly 22,000 people from other provinces on a net basis in 2022, the highest level since 2014 and the largest among provinces.

Alberta’s population is forecast to rise 2.2% in the 2023 census year (Chart 5). Immigration will get a boost from higher national targets set by the federal government, while strong levels of temporary foreign workers coming into the province will continue to buoy non-permanent residents. With activity slowing more sharply in the rest of the country, Alberta is also expected to see robust inflows of interprovincial migrants given its relatively strong economic conditions, favourable housing affordability and lower cost of living. Population growth is forecast to moderate over the medium term to 1.6% by 2025.

Employment to expand

Employment in the province has regained some momentum after stalling in the summer. It has been buoyed by renewed strength in some sectors such as construction and retail & wholesale trade, as well as ongoing gains in professional, scientific and technical services. Employment has expanded by more than 79,000 since December 2021, with services sector leading the way. Tourism-related industries such as food & accommodation continue to make headway despite difficulties finding workers. Goods sector employment has also improved in recent months, but still lags behind other industries. Even so, Alberta’s overall employment recovery from the pandemic outpaced that of most provinces (Chart 6). Employment is now forecast to grow 5.2% this year, down slightly from the first quarter.

The province is expected to continue adding jobs next year, but at a more moderate pace of 2.4%, driven by rising investment and solid population growth. While small business sentiment has pulled back from recent highs, firms remain optimistic that

their performance will be stronger over the next year. With continued inward migration, many employers will be able to fill vacant positions, particularly for those industries where shortages remain acute. Employment growth is expected to accelerate to 2.6% in 2024 as interest rates fall and global growth picks up, before moderating to around 2.3% in 2025.

As hiring pressures ease off, the unemployment rate is forecast to tick up slightly in 2023. The labour force is anticipated to expand significantly

with a surge in population and a rebound in the participation rate. After remaining steady in 2022, the participation rate is expected to improve 0.2 percentage points to 69.4% in 2023. The unemployment rate is forecast to increase to 6% next year before declining gradually to 5.5% by 2025. After remaining subdued this year, growth in average weekly earnings is expected to pick up in the next few years as compositional factors fade and wages catch up with inflation. It is forecast to accelerate from 2.3% this year to 3.9% by 2025.

Chart 5: Strong population growth to continue in 2023

Annual change in Alberta population by component

Sources: Statistics Canada, Haver Analytics, and Alberta Treasury Board & Finance; f-forecast

Chart 6: Alberta’s employment recovery outpaces most provinces

Percentage change in seasonally adjusted employment since February 2020

Sources: Statistics Canada and Haver Analytics

2022-23 Mid-year Fiscal Update and Economic Statement 15

Inflation cooling gradually

Consumer inflation has cooled down from its peak, although it has been more persistent than expected since first quarter and price pressures remain broad-based. While growth in energy prices has declined sharply due to lower gasoline prices and the impact of the provincial government’s affordability measures, prices for other components such as food and services have accelerated, keeping inflation stubbornly high (Chart 7). In particular, growth in food prices rose to the highest rate since 1981 in October, as higher input prices such as fertilizers and natural gas, unfavourable weather and ongoing geopolitical instability stemming from the war in Ukraine contributed to the increase. Core inflation (all items except food and energy) also rose, with growth in prices for services jumping to a new 14-year high. Headline inflation is now forecast to average 6.3% this year, up 0.2 percentage points from first quarter.

The impact of unprecedented interest rate hikes by the Bank of Canada will be felt more next year as demand slows further. This, coupled with moderating energy prices and smaller base year effects, should help bring inflation further down to an average of 3.3% for 2023 before returning back to around 2% over the medium term.

Households restrain spending

Household finances and consumer spending will remain under pressure in the near term until inflation eases significantly and wage growth accelerates. The combination of persistently high inflation and rising interest rates this year has dampened consumer sentiment and eroded household spending power. Growth in retail spending has moderated significantly as a result, particularly for discretionary and big-ticket items such as motor vehicles and renovation-related building materials. The slowdown in goods spending has been somewhat offset by pent-up demand for discretionary services such as restaurant sales and hotel occupancy rates, which have rebounded strongly so far this year. Real consumer spending is now expected to rise 4.5% this year, 0.8 percentage points lower than first quarter.

Higher interest rates are expected to work their way through the economy and will further slow growth in real consumer spending to 1.6% in 2023 (Chart 8). As inflation eases and rising wages begin to catch up, growth in real consumer spending is set to accelerate and outpace population growth again at 2.9% in 2024.

Housing market resilient

Alberta’s housing market is faring better compared to the rest of the country despite the rapid rise in interest rates. Although resale activity has pulled back

from the exceptionally high levels seen earlier in the year, it is still up 4% year-to-date and higher than pre-pandemic levels. Housing starts jumped above 48,000 units in October to the highest level since early 2015, and are up 22% so far this year (Chart 9). This is in contrast to the national level, where unit sales and housing starts have fallen 23% and 4.3% year-to-date, respectively. While Alberta’s housing activity surged following the onset of the pandemic, the market never became overheated and the run-up in home prices was far more muted compared to other provinces.

Chart 7: Food prices contributing more to headline inflation

Contribution to Alberta’s headline consumer inflation

Sources: Statistics Canada and Alberta Treasury Board and Finance calculations

* Energy includes gasoline, natural gas and electricity

Chart 8: Consumer spending on goods to stall next year

Contribution to annual change in real consumer spending by component

Sources: Statistics Canada, Haver Analytics and Alberta Treasury Board and Finance; f-forecast

16 2022-23 Mid-year Fiscal Update and Economic Statement

With the strength so far this year, housing starts are forecast to average around 38,000 units in 2022. Homebuilding activity in Alberta is being buoyed by elevated commodity prices, favourable affordability and strong migration into the province which is also boosting construction of multi-family rental units. Tight inventories of new and existing homes are also supporting activity, with the number of completed and unabsorbed units near levels seen prior to the 2015-16 recession.

The pace of housing starts is expected to ease in the next two years, averaging between 34,000 and 35,000 units. The slowdown reflects the lagged impact of higher interest rates and more moderate rise in input prices. However, Alberta’s strong demand fundamentals – such as robust population growth and healthy labour market – will keep the annual pace of housing starts higher than 2015-2021 levels. While a decline in renovation spending and slower resale activity will be a drag next year, new housing construction in the second half of 2022 is expected to carry through and buoy residential investment in the early part of 2023.

Risks to Outlook

Alberta’s economy cannot be insulated from the impacts of geopolitical uncertainty, global economic slowdown and tighter financial conditions. The current economic environment is highly uncertain.

To support the understanding of these risks, two scenarios are considered. The low scenario assumes oil prices remain well below the base forecast starting in early 2023. Weak economic growth in China and contraction in the U.S. and Europe in the first two quarters of 2023 result in sharply weaker global energy demand next year. Global economic growth is expected to be lower than the base case forecast in 2024 and 2025 before normalizing in 2026, but at an overall lower level of economic activity and oil demand than the base forecast. This leads to significantly less investment in the oil and gas sector and lower oil

Chart 9: Housing starts resilient despite rising interest rates

Annualized housing starts, existing home sales and average resale price*

Sources: Canada Real Estate Association, Canada Mortgage & Housing Corporation and Haver Analytics

* 3-month moving average

production in Alberta, which results in a weaker Alberta economy. The combined effects of the oil price shock and a weak global economy in the first half of 2023 are lower Canadian interest rates, a weaker Canadian Dollar, and lower consumption, lower employment, lower investment, and a lower rate of population growth in Alberta. A weaker economy has commensurately negative impacts on Alberta’s corporate and personal tax revenue, and the low oil prices severely negatively affect Alberta’s natural resource revenue.

The alternative high scenario assumes oil prices rise well above the base forecast starting in early 2022, driven by continued strong global demand growth and the effects of global underinvestment in recent years limiting oil production growth. High oil prices gradually drive higher energy sector investment and oil production growth in Alberta, though companies remain disciplined in their capital allocation decisions and disproportionately invest in conventional oil and gas production to see a faster return on investment than in the oil sands. Oil prices slowly retreat over several years towards the base forecast, but oil and gas production, investment, and corporate revenues remain higher than the base forecast. The improving

energy sector outlook leads to moderate increases in Canadian interest rates and the Canadian Dollar, although these only provide a modest drag on Alberta’s economic growth. This stronger economic performance in the province leads to significantly higher net interprovincial migration, as Canadian residents from other provinces move to Alberta for the economic opportunities the province’s strong economy affords. All together, this results in stronger household consumption growth, higher wage growth, higher employment growth, and an unemployment rate declining more than in the base forecast. This economic strength translates into substantial increases in Alberta’s corporate and personal tax revenue, and higher energy prices result in even faster growth in Alberta’s natural resource revenue.

Neither scenario includes additional fiscal policy responses from the federal or provincial governments beyond what is included in the base forecast that would buffer the downside to the economy in the low scenario nor that would temper the upside to the economy in the high scenario.

2022-23 Mid-year Fiscal Update and Economic Statement 17

Table 1: Scenario Impacts

Fiscal Year Assumptions	2022-23		2023-24		2024-25
WTI (US$/bbl)
Base		91.50		78.50		73.50
High		98.50		108.50		96.50
Low		87.50		55.50		61.00
Light-Heavy Differential (US$/bbl)
Base		19.80		18.10		16.10
High		20.70		21.50		18.50
Low		20.20		15.80		14.80
Exchange Rate (US¢/Cdn$)
Base		75.2		76.3		78.2
High		75.7		78.3		79.9
Low		74.7		74.4		77.3
Tax and Resource Revenue ($billions)*
Base		49.8		42.1		40.5
Variance from base
High		5.7		19.8		17.5
Low		-3.4		-13.9		-8.8

Calendar Year Assumptions	2022		2023		2024		2025
Real GDP (% Change)
Base		4.8		2.7		2.9		2.8
High		4.8		5.0		4.3		3.3
Low		4.8		1.2		1.3		1.9
Nominal GDP (% Change)
Base		24.1		1.7		2.2		2.6
High		24.1		13.5		2.8		0.1
Low		24.1		-7.8		4.5		1.9
Employment (thousands)
Base		2,355		2,412		2,474		2,531
High		2,355		2,443		2,532		2,595
Low		2,355		2,394		2,431		2,475

* Tax revenue includes personal and corporate income taxes, fuel tax, tobacco/vaping taxes, cannabis tax, insurance premiums tax, the tourism levy and the freehold mineral tax.

18 2022-23 Mid-year Fiscal Update and Economic Statement

Key Energy and Economic Assumptions

	2020-21		2021-22		2022-23 Forecast				2023-24		2024-25
Fiscal Year Assumptionsa	Actuals		Actuals		Budget		Q2		Forecast		Forecast
Crude Oil Pricesb
WTI (US$/bbl)		42.32		77.03		70.00		91.50		78.50		73.50
Light-Heavy Differential (US$/bbl)		10.58		13.56		14.30		19.80		18.10		16.10
WCS @ Hardisty (Cdn$/bbl)		41.42		79.63		70.30		94.70		79.30		73.30
Natural Gas Priceb
Alberta Reference Price (Cdn$/GJ)		2.10		3.48		3.20		5.40		4.40		3.80
Production
Conventional Crude Oil (thousands of barrels/day)		401		445		441		483		492		494
Raw Bitumen (thousands of barrels/day)		2,969		3,197		3,296		3,297		3,357		3,415
Natural Gas (billions of cubic feet)		3,857		4,027		4,118		4,219		4,301		4,330
Interest Ratesb
3-month Canada Treasury Bills (%)		0.14		0.19		0.70		3.00		3.70		3.00
10-year Canada Bonds (%)		0.74		1.56		1.80		3.10		3.80		3.70
Exchange Rate (US¢/Cdn$)b		75.7		79.8		79.0		75.2		76.3		78.2

	2020		2021		2022 Forecast						2023		2024		2025
Calendar Year Assumptionsa	Actuals		Actuals		Budget			Q2			Forecast		Forecast		Forecast
Gross Domestic Product
Nominal (billions of dollars)		296.7		374.5		390.0	d		464.7			472.6		483.0		495.6
% change		-15.7		26.2		11.2	d		24.1			1.7		2.2		2.6
Real (billions of 2012 dollars)		320.3		335.6		356.7	d		351.7			361.2		371.6		382.0
% change		-8.0		4.8		5.4	d		4.8			2.7		2.9		2.8
Other Indicators
Employment (thousands)		2,130		2,239		2,330			2,355			2,412		2,474		2531
% change		-6.6		5.1		4.1			5.2			2.4		2.6		2.3
Unemployment Rate (%)		11.4		8.7		6.6			5.8			6.0		5.8		5.5
Average Weekly Earnings (% change)		3.2		2.1		3.4			2.3			3.4		3.9		3.9
Primary Household Income (% change)		-4.8		5.8		6.7			7.1			5.4		6.6		5.9
Net Corporate Operating Surplus (% change)		-60.3		284.9		30.8			85.1			0.9		1.8		3.6
Housing Starts (thousands of units)		24.0		31.9		32.2			38.3			34.1		34.7		36.0
Alberta Consumer Price Index (% change)		1.1		3.2		3.2			6.3			3.3		2.2		2.2
Retail Sales (% change)		-2.1		11.5		9.3			11.5			4.5		5.2		5.5
Population (thousands)		4,417		4,444		4,506			4,543	c		4,643		4,727		4,803
% change		1.2		0.6		1.4			2.2	c		2.2		1.8		1.6
Net Migration (thousands)		30.5		8.2		43.8			81.7	c		81.5		65.0		55.7

^a  Forecast was finalized on November 7, 2022.

^b  Forecasts have been rounded.

^c  Estimate

^d  Budget 2022 and the mid-year forecast were finalized prior to the release of the Provincial Economic Accounts 2021 actuals on November 8, 2022.

2022-23 Mid-year Fiscal Update and Economic Statement 19

Benchmarking Tables

Oil Price Benchmark

West Texas Intermediate (US$/bbl)

Organization	2022		2023		2024		2025
National Forecasting Agencies
Conference Board of Canada (November 3, 2022)		97.60		88.60		84.50		81.80
Stokes Economics (August 2, 2022)		102.00		93.00		83.00		77.00
Banks and Investment Dealers
Credit Suisse (September 15, 2022)		96.70		82.00		77.00		n/a
Deloitte (September 30, 2022)		96.76		83.20		79.55		75.75
Goldman Sachs (October 5, 2022)		97.64		105.00		85.00		n/a
Laurentian Bank (August 13, 2022)		98.45		91.25		n/a		n/a
National Bank (October 2022)		90.95		81.00		n/a		n/a
RBC Capital Markets (November 9, 2022)		94.55		91.25		n/a		n/a
Scotiabank (October 17, 2022)		98.00		94.00		75.00		n/a
TD Bank (October 2022)		94.95		84.25		n/a		n/a
Industry Analysts
U.S. Energy Information Administration (November 3, 2022)		95.88		89.33		n/a		n/a
GLJ Petroleum Consultants (October 1, 2022)		93.50		75.00		76.00		77.00
Sproule Associates Limited (October 31, 2022)		95.11		86.00		85.00		80.00
Confidential Forecasts Provided to the Government of Albertaa
Average		96.00		88.50		84.00		80.00
High		102.00		105.00		100.00		95.00
Low		90.95		75.00		73.15		63.65
Average of All Private Forecasts		96.50		88.00		82.00		79.00
Government of Alberta (calendar year)		94.50		80.00		75.00		70.00

Includes forecasts finalized on or before November 9, 2022.

^a  The Confidential Forecast provided to the Government of Alberta include forecasts from S&P Global Platts, the Bank of Montreal, IHS Markit, Rystad Energy, and Wood Mackenzie. High/Low forecasts may represent one of the confidential forecasts. Averages and the Government of Alberta forecast have been rounded to the nearest 50 cents.

20 2022-23 Mid-year Fiscal Update and Economic Statement

Light-Heavy Oil Price Differential Benchmark

WTI-WCS Price Differential ($US/bbl)	2022		2023		2024		2025
High		20.15		19.00		16.00		15.71
Low		13.60		14.10		12.50		12.69
Average of All Private Forecasts		16.90		16.10		14.20		13.70
Government of Alberta (calendar year)		18.20		19.30		16.30		15.50
Number of Private Sector Forecasters		10		10		9		7

Includes forecasts finalized on or before November 9, 2022.

Natural Gas Price Benchmark

Henry Hub (US$/MMBtu)ab	2022		2023		2024		2025
High		7.40		6.90		5.30		4.68
Low		5.60		4.00		3.45		3.05
Average of All Private Forecasts		6.60		5.30		4.30		4.00
Government of Alberta (calendar year)		6.70		5.40		4.20		4.00
Number of Private Sector Forecasters		17		17		14		12

Includes forecasts finalized on or before November 9, 2022.

^a The natural gas price at Henry Hub Louisiana (in US$/MMBtu) is the US benchmark while the AECO natural gas price (in CAD$/GJ) is the Western Canada benchmark. The Alberta Reference Price (used in natural gas royalty calculations) represents the average field price of all Alberta gas sales which normally follows the Western Canada regional benchmark. The average and Government of Alberta forecast are rounded to the nearest 10 cents.

United States / Canada Exchange Rate Benchmark

(US¢/Cdn$)	2022		2023		2024		2025
High		78.0		80.5		82.4		83.4
Low		72.0		72.0		77.1		76.8
Average of All Private Forecasts		76.0		75.6		78.9		80.1
Government of Alberta (calendar year)		76.6		75.4		77.8		79.2
Number of Private Sector Forecasters		10		10		5		2

Includes forecasts finalized on or before November 9, 2022.

Canadian Long-Term Interest Rate Benchmark

10-Year Government of Canada Bonds (%)	2022		2023		2024		2025
High		3.05		3.83		3.50		3.60
Low		2.62		2.73		3.20		3.17
Average of All Private Forecasts		2.90		3.30		3.30		3.40
Government of Alberta (calendar year)		2.80		3.60		3.80		3.70
Number of Private Sector Forecasters		10		10		4		2

Includes forecasts finalized on or before November 9, 2022.

2022-23 Mid-year Fiscal Update and Economic Statement 21

Alberta Real Gross Domestic Product Benchmark

(% change)	2022		2023		2024		2025
High		5.1		2.9		2.7		2.2
Low		3.9		1.1		1.4		1.6
Average of All Private Forecasts		4.6		1.9		1.9		1.9
Government of Alberta (calendar year)		4.8		2.7		2.9		2.8
Number of Private Sector Forecasters		9		9		7		2

Includes forecasts finalized on or before November 9, 2022.

Alberta Nominal Gross Domestic Product Benchmark

(% change)	2022		2023		2024		2025
High		26.5		5.7		4.5		2.3
Low		19.2		-1.8		1.0		1.5
Average of All Private Forecasts		21.8		2.0		2.6		1.9
Government of Alberta (calendar year)		24.1		1.7		2.2		2.6
Number of Private Sector Forecasters		8		8		6		2

Includes forecasts finalized on or before November 9, 2022.

Alberta Employment Benchmark

(% change)	2022		2023		2024		2025
High		5.4		2.1		1.8		1.5
Low		4.6		0.9		1.0		1.2
Average of All Private Forecasts		5.0		1.4		1.4		1.3
Government of Alberta (calendar year)		5.2		2.4		2.6		2.3
Number of Private Sector Forecasters		8		8		6		2

Includes forecasts finalized on or before November 9, 2022.

Alberta Unemployment Rate Benchmark

(%)	2022		2023		2024		2025
High		6.0		6.1		6.4		5.7
Low		5.6		5.0		5.3		5.4
Average of All Private Forecasts		5.8		5.7		5.8		5.6
Government of Alberta (calendar year)		5.8		6.0		5.8		5.5
Number of Private Sector Forecasters		9		9		7		2

Includes forecasts finalized on or before November 9, 2022.

Alberta Housing Starts Benchmark

(thousands of units)	2022		2023		2024		2025
High		40.0		40.0		39.0		33.8
Low		35.0		26.0		22.0		31.0
Average of All Private Forecasts		37.5		33.2		31.6		32.4
Government of Alberta (calendar year)		38.3		34.1		34.7		36.0
Number of Private Sector Forecasters		8		8		6		2

Includes forecasts finalized on or before November 9, 2022.

22 2022-23 Mid-year Fiscal Update and Economic Statement

2022-23

Mid-year Tables

2022-23 to 2024-25

2022-23 Mid-year Fiscal Update and Economic Statement 23

Table of Contents

Tables

Consolidated Fiscal Summary	25
Statement of Financial Position	26
Capital Assets	26
Revenue	27
Operating Expense	28
Inventory Consumption	28
Debt Servicing Costs	29
Capital Amortization	29
Inventory Acquisition	29
Contingency / Disaster and Emergency Assistance	30
Pension Liabilities	30
Borrowing Requirements	30
Borrowing Sources	30
Cash Adjustments	31
Capital Plan	32
Capital Grants	32
Capital Investment	33
Fiscal Plan and Capital Plan Liability Principal Repayments	33
Capital Plan Funding Sources	33
Historical Fiscal Summary, 2008-09 to 2024-25	34

24 2022-23 Mid-year Fiscal Update and Economic Statement

Consolidated Fiscal Summary

(millions of dollars)

	2021-22			2022-23						Change fr.			2023-24			2024-25
Statement of Operations	Actual			Budget			Forecast			Budget			Target			Target
1   Total Revenue		68,322			62,607			76,901			14,294			69,551			69,864
Expense
2     Operating expense (includes 2021-22 crude-by-rail expense)		49,531			50,800			51,976			1,176			52,784			54,026
3       % change from prior year		6.2			1.5			4.9			—			1.6			2.4
4     Capital grants		2,118			2,148			2,236			88			2,316			2,735
5     Amortization / inventory consumption / loss on disposals		3,622			4,057			4,007			(50	)		4,136			4,210
6     Taxpayer-supported debt servicing costs		2,278			2,443			2,303			(140	)		2,347			2,056
7     Self-supported debt servicing costs		363			219			399			180			403			495
8     Pension provisions		(365	)		(289	)		(312	)		(23	)		(317	)		(325	)
9   Expense (before COVID-19 / Recovery Plan, Contingency)		57,547			59,378			60,609			1,231			61,669			63,197
COVID-19 / Recovery Plan:
10     Operating expense		2,812			687			1,360			673			149			153
11     Capital grants		385			281			284			3			168			148
12     Inventory consumption (PPE)		564			—			168			168			—			—
13     Contingency for COVID-19 / Recovery Plan – unallocated		—			750			186			(564	)		—			—
14   Contingency / disaster and emergency assistance		3,076			1,000			700			(300	)		750			750
15   Provision for affordabilty initiatives		—			—			1,300			1,300			1,200			300
16   Total Expense		64,378			62,096			64,607			2,511			63,936			64,548
17   Surplus / Deficit		3,944			511			12,294			11,783			5,615			5,316
Capital Plan
18     Capital grants		2,503			2,429			2,520			91			2,484			2,883
19     Capital investment		4,119			5,105			5,093			(12	)		4,258			3,728
20   Total Capital Plan		6,622			7,534			7,614			80			6,742			6,610
Cash Adjustments / Borrowing Requirements	(at March 31)
21   Cash at start of year		7,429			7,241			8,858			1,617			—			—
22   Surplus / (deficit)		3,944			511			12,294			11,783			5,615			5,316
23   Cash adjustments (for details, see table on page 31)
24     Retained income of funds and agencies		(1,941	)		(1,435	)		(2,028	)		(593	)		(1,971	)		(2,711	)
25     Other cash adjustments		(2,268	)		917			2,375			1,458			1,081			530
26     Capital cash adjustments		2,402			(2,026	)		(2,297	)		(271	)		(1,670	)		(1,215	)
Total cash available for allocation		9,566			5,207			19,202			13,995			3,055			1,920
27     Taxpayer-supported debt repayment		(708	)		(3,207	)		(13,354	)		(10,147	)		(2,314	)		(1,440	)
28     Allocation for savings / future-year debt repayment		—			—			(5,848	)		(5,848	)		(741	)		(480	)
29   Cash at end of year		8,858			2,000			—			(2,000	)		—			—
Taxpayer-supported Liabilities / Borrowing	(at March 31)
Liabilities for Capital Projects
30   Opening balance		42,733			47,381			47,529			148			45,917			43,960
31   Alternative financing (P3s – public-private partnerships)		43			81			56			(25	)		64			1
32   Direct borrowing		4,812			—			—			—			—			—
33   Re-financing of existing debt		1,112			224			—			(224	)		—			1,557
34   Principal repayments / amortization of debt issue costs		(1,171	)		(1,668	)		(1,668	)		—			(2,021	)		(1,630	)
35   Total Liabilities for Capital Projects		47,529			46,018			45,917			(101	)		43,960			43,888
Borrowing for the Fiscal Plan
36   Opening balance		50,303			50,303			45,595			(4,708	)		33,909			29,230
37   Direct borrowing for Fiscal Plan		—			—			—			—			—			—
38   Re-financing of existing debt		—			—			—			—			—			3,833
39   Principal repayments		(4,708	)		(1,603	)		(11,686	)		(10,083	)		(4,679	)		(5,514	)
40   Total Borrowing for the Fiscal Plan / Other		45,595			48,700			33,909			(14,791	)		29,230			27,549
41   Total Taxpayer-supported Debt - Capital Projects / Fiscal Plan / Other		93,124			94,718			79,826			(14,892	)		73,190			71,437

2022-23 Mid-year Fiscal Update and Economic Statement 25

Statement of Financial Position^a

(millions of dollars)

	At March 31
	2022			2023						2024			2025
	Actual			Budget			Forecast			Target			Target
Financial Assets
Alberta Heritage Savings Trust Fund		17,094			17,588			18,466			19,371			21,009
Endowment funds:
Alberta Heritage Foundation for Medical Research		2,094			2,200			2,034			2,101			2,280
Alberta Heritage Science and Engineering Research		1,249			1,330			1,218			1,244			1,324
Alberta Heritage Scholarship		1,447			1,525			1,388			1,391			1,458
Alberta Enterprise Corporation		292			339			339			336			333
Cash available for allocation to debt repayment / savings		8,858			3,617			5,848			2,203			2,442
Self-supporting lending organizations / activities:
Loans to local authorities		14,424			14,514			14,688			14,518			14,332
Agriculture Financial Services Corporation		3,957			4,686			4,337			4,885			5,468
Equity in commercial enterprises		1,766			1,907			1,957			2,299			2,403
Student loans		3,647			4,149			4,202			4,745			5,289
Technology Innovation Emissions Reduction Fund		337			412			412			489			488
Other financial assets (including SUCH sector / Alberta Innovates Corp.)		22,961			22,362			21,433			19,929			19,996
Total Financial Assets		78,126			74,629			76,322			73,511			76,822
Liabilities
Taxpayer-supported debt:
Direct borrowing for the Capital Plan		44,482			43,127			42,903			40,974			40,999
Alternative financing for Capital Plan (public-private partnerships - P3s)		3,047			3,039			3,014			2,986			2,889
Debt issued to reduce pre-1992 TPP unfunded liability		594			594			594			594			594
Direct borrowing for the Fiscal Plan		45,001			43,398			33,315			28,636			26,955
Total taxpayer-supported debt		93,124			90,158			79,826			73,190			71,437
Self-supporting lending organization / activities debt:
For local authority loans		14,424			14,514			14,688			14,518			14,332
Agriculture Financial Services Corporation		2,604			2,672			2,685			3,006			3,180
Total debt		110,152			107,344			97,199			90,714			88,949
Coal phase-out liabilities		770			694			694			617			538
Pension liabilities		8,271			7,982			7,959			7,642			7,317
Other liabilities (including SUCH sector / Alberta Innovates Corp.)		15,899			16,620			16,494			15,717			16,139
Total Liabilities		135,092			132,640			122,346			114,690			112,943
Net Financial Assets / (Debt)		(56,966	)		(58,011	)		(46,024	)		(41,179	)		(36,121	)
Capital / Other Non-financial Assets		58,576			60,271			60,090			60,960			61,251
Spent deferred capital contributions		(3,523	)		(3,662	)		(3,685	)		(3,785	)		(3,818	)
Net Assets		(1,913	)		(1,402	)		10,381			15,996			21,312
Net financial debt / GDP (calendar year, nominal)		-15.2	%		-14.9	%		-9.9	%		-8.7	%		-7.5	%

^a  2023 Budget, and 2024 and 2025 Target numbers have been restated to reflect 2021-22 Actual results.

Capital Assets

(millions of dollars)

	At March 31
	2022			2023						2024			2025
	Actual			Budget			Forecast			Target			Target
Net book value at start of the year		55,855			57,322			57,322			58,874			59,597
Additions (capital investment)		4,119			5,105			5,093			4,258			3,728
Contingency		—			(750	)		(750	)		(650	)		(650	)
Amortization		(2,586	)		(2,839	)		(2,789	)		(2,885	)		(2,933	)
Net book value of capital asset disposals / adjustments		(66	)		(1	)		(2	)		—			—
Net Book Value at End of Year		57,322			58,837			58,874			59,597			59,742

26 2022-23 Mid-year Fiscal Update and Economic Statement

Revenue

(millions of dollars)

	2021-22			2022-23						Change fr.			2023-24			2024-25
	Actual			Budget			Forecast			Budget			Target			Target
Income Taxes
Personal income tax		13,335			13,382			13,299			(83	)		13,751			14,683
Corporate income tax		4,718			4,040			6,252			2,212			6,224			6,623
		18,053			17,422			19,551			2,129			19,975			21,306
Other Taxes
Education property tax (includes opted-out boards)		2,478			2,504			2,504			—			2,541			2,566
Fuel tax		1,275			1,319			332			(987	)		1,087			1,364
Tobacco / vaping taxes		617			644			582			(62	)		584			578
Insurance taxes		753			819			798			(21	)		851			908
Cannabis tax		164			157			157			—			169			176
Tourism levy		59			73			91			18			95			104
Freehold mineral rights tax		107			96			156			60			138			121
		5,453			5,612			4,620			(992	)		5,465			5,817
Non-Renewable Resource Revenue
Bitumen royalty		11,605			10,349			19,353			9,004			13,087			10,874
Crude oil royalty		1,947			1,670			4,003			2,333			3,037			2,542
Natural gas and by-products royalty		2,227			1,458			4,214			2,756			2,644			2,160
Bonuses and sales of Crown leases		228			236			394			158			291			269
Rentals and fees / coal royalty		163			127			160			33			130			123
		16,170			13,840			28,124			14,284			19,189			15,968
Transfers from Government of Canada
Canada Health Transfer		5,503			5,352			5,579			227			5,920			6,344
Canada Social Transfer		1,796			1,868			1,885			17			1,962			2,035
Direct transfers to SUCH sector / Alberta Innovates Corporation		478			579			639			60			617			624
Infrastructure support		808			1,293			1,158			(135	)		1,000			1,115
Agriculture support programs		531			296			300			4			312			334
Labour market agreements		485			322			324			2			322			322
Canada-Alberta Canada wide Early Learning Child Care Agreement		105			674			674			—			830			997
Other (incl. $707 million for fiscal stabil. In 2022-23 for 2020-21 rev. decline )		1,889			1,670			1,928			258			561			520
		11,595			12,054			12,487			433			11,524			12,291
Investment Income
Alberta Heritage Savings Trust Fund		2,128			1,976			248			(1,728	)		1,031			1,768
Endowment funds		514			440			15			(425	)		262			493
Income from local authority loans		329			185			334			149			325			437
Agriculture Financial Services Corporation		126			113			113			—			120			126
Other (includes SUCH sector)		482			459			485			26			594			534
		3,579			3,173			1,195			(1,978	)		2,332			3,358
Net Income from Government Business Enterprises
AGLC – Gaming / lottery		1,205			1,468			1,469			1			1,491			1,476
AGLC – Liquor		854			850			838			(12	)		854			861
AGLC – Cannabis		(4	)		7			7			—			5			6
ATB Financial		586			313			288			(25	)		316			331
Balancing Pool		96			112			112			—			112			112
Other (CUDGCo / APMC / PSIs)		2,073			(315	)		(239	)		76			(121	)		(364	)
		4,810			2,435			2,475			40			2,657			2,422
Premiums, Fees and Licences
Post-secondary institution tuition fees		1,465			1,645			1,669			24			1,780			1,863
Health / school board fees and charges		603			661			669			8			700			754
Motor vehicle licences		566			548			561			13			576			589
Crop, hail and livestock insurance premiums		324			359			359			—			385			417
Energy industry levies		313			309			310			1			305			305
Other (includes land titles, lands and grazing, health benefit premiums)		1,249			968			1,188			220			987			990
		4,520			4,490			4,756			266			4,734			4,920
Other
SUCH sector sales, rentals and services		806			876			888			12			927			947
SUCH sector fundraising, donations, gifts and contributions		741			640			635			(5	)		655			663
AIMCo investment management charges		847			729			729			—			866			892
Fines and penalties		187			273			254			(19	)		226			226
Refunds of expense		60			182			153			(29	)		108			113
Technology Innovation and Emissions Reduction Fund		705			421			559			138			414			451
Miscellaneous (includes Alberta Innovates Corporation)		796			460			475			15			478			491
		4,142			3,581			3,693			112			3,675			3,782
Total Revenue		68,322			62,607			76,901			14,294			69,551			69,864

2022-23 Mid-year Fiscal Update and Economic Statement 27

Operating Expense

(millions of dollars)

	2021-22		2022-23				Change fr.			2023-24		2024-25
	Actual		Budget		Forecast		Budget			Target		Target
Advanced Education		5,280		5,444		5,441		(3	)		5,519		5,637
Agriculture, Forestry and Rural Economic Development		789		860		859		(1	)		849		828
Children’s Services		1,706		2,388		2,386		(2	)		2,538		2,707
Community and Social Services		3,714		3,923		3,918		(5	)		3,969		4,062
Culture and Status of Women		161		150		162		12			152		152
Education		7,846		8,390		8,454		64			8,581		8,616
Energy (incl. crude-by-rail expense of $866 million in 2021-22)		1,767		559		1,181		622			740		689
Environment and Parks		519		507		604		97			494		579
Executive Council		14		19		19		—			19		19
Health		21,302		22,018		22,358		340			23,172		23,959
Indigenous Relations		153		165		166		1			192		193
Infrastructure		430		408		411		3			410		410
Jobs, Economy and Innovation		265		380		384		4			378		382
Justice and Solicitor General		1,478		1,475		1,525		50			1,548		1,554
Labour and Immigration		190		225		228		3			228		229
Municipal Affairs		251		261		260		(1	)		262		262
Seniors and Housing		616		701		690		(11	)		704		722
Service Alberta		459		452		457		5			442		434
Transportation		437		461		460		(1	)		454		451
Treasury Board and Finance		2,036		1,848		1,846		(2	)		1,973		2,007
Legislative Assembly		117		170		170		—			164		135
Operating Expense before COVID-19 / Recovery Plan		49,531		50,800		51,976		1,176			52,784		54,026
COVID-19 / Recovery Plan operating expense
Advanced Education		17		62		62		—			5		5
Children’s Services		36		—		—		—			—		—
Community and Social Services		31		—		—		—			—		—
Culture and Status of Women		12		—		—		—			—		—
Education		130		13		21		8			—		—
Energy		318		310		600		290			12		16
Environment and Parks		39		27		27		—			—		—
Health		1,528		10		385		375			—		—
Infrastructure		6		5		5		—			—		—
Jobs, Economy and Innovation		240		155		155		—			121		124
Justice and Solicitor General		1		—		—		—			—		—
Labour and Immigration		224		98		98		—			2		—
Municipal Affairs		21		—		—		—			—		—
Seniors and Housing		30		—		—		—			—		—
Service Alberta		20		7		7		—			9		8
Transportation		159		—		—		—			—		—
Contingency – COVID-19 / Recovery Plan – unallocated		—		750		186		(564	)		—		—
COVID-19 / Recovery Plan operating expense		2,812		1,437		1,546		109			149		153
Total Operating Expense		52,343		52,237		53,522		1,285			52,933		54,179
Inventory Consumption
(millions of dollars)
	2021-22		2022-23				Change fr.			2023-24		2024-25
	Actual		Budget		Forecast		Budget			Target		Target
Advanced Education		48		163		163		—			162		166
Agriculture, Forestry and Rural Economic Development		1		1		1		—			1		1
Culture and Status of Women		—		1		1		—			1		1
Education		83		—		—		—			—		—
Health		1,359		988		1,153		165			1,021		1,043
Infrastructure		2		2		2		—			2		2
Municipal Affairs		35		—		1		1			—		—
Service Alberta		4		6		6		—			6		6
Transportation		60		57		57		—			57		57
Total Inventory Consumption		1,591		1,217		1,384		167			1,250		1,276

28 2022-23 Mid-year Fiscal Update and Economic Statement

Debt Servicing Costs

(millions of dollars)

	2021-22		2022-23				Change fr.			2023-24		2024-25
	Actual		Budget		Forecast		Budget			Target		Target
Taxpayer-supported general debt servicing costs
Education – school boards		9		9		9		—			9		9
Treasury Board and Finance – direct borrowing		1,154		1,150		1,026		(124	)		1,060		769
Total		1,163		1,159		1,035		(124	)		1,069		778
Taxpayer-supported Capital Plan debt servicing costs
Education – Alberta Schools Alternative Procurement P3s		26		25		25		—			24		27
Transportation – ring road P3s		103		103		103		—			101		97
Treasury Board and Finance – direct borrowing		987		1,156		1,140		(16	)		1,153		1,154
Total		1,116		1,284		1,268		(16	)		1,278		1,278
Total taxpayer-supported debt servicing costs		2,278		2,443		2,303		(140	)		2,347		2,056
Self-supported debt servicing costs
Treasury Board and Finance – loans to local authorities		298		155		327		172			317		407
Treasury Board and Finance – Ag. Financial Services Corp.		65		64		72		8			86		88
Total self-supported debt servicing costs		363		219		399		180			403		495
Total Debt Servicing Costs		2,641		2,662		2,702		40			2,750		2,551
Capital Amortization
(millions of dollars)
	2021-22		2022-23				Change fr.			2023-24		2024-25
	Actual		Budget		Forecast		Budget			Target		Target
Advanced Education		530		557		557		—			565		576
Agriculture, Forestry and Rural Economic Development		23		21		21		—			19		20
Culture and Status of Women		7		8		8		—			8		7
Education		471		472		472		—			476		475
Energy		16		20		15		(5	)		20		20
Environment and Parks		53		99		56		(43	)		58		62
Health		472		518		518		—			546		542
Infrastructure		126		151		151		—			159		164
Jobs, Economy and Innovation		8		9		9		—			9		9
Justice and Solicitor General		3		6		6		—			6		6
Labour and Immigration		2		1		1		—			1		1
Municipal Affairs		27		31		31		—			31		31
Seniors and Housing		44		46		46		—			46		39
Service Alberta		75		88		88		—			88		88
Transportation		700		780		780		—			823		861
Treasury Board and Finance		27		28		28		—			28		30
Legislative Assembly		2		2		2		—			2		2
Total Amortization Expense		2,586		2,839		2,789		(50	)		2,885		2,933
Inventory Acquisition
(millions of dollars)
	2021-22		2022-23				Change fr.			2023-24		2024-25
	Actual		Budget		Forecast		Budget			Target		Target
Advanced Education		45		181		181		—			181		181
Agriculture, Forestry and Rural Economic Development		2		1		1		—			1		1
Culture and Status of Women		—		1		1		—			1		1
Education		79		—		—		—			—		—
Health		1,257		1,148		1,143		(5	)		1,149		1,174
Infrastructure		2		2		2		—			2		2
Municipal Affairs		3		—		1		1			—		—
Service Alberta		4		6		5		(1	)		6		6
Transportation		54		57		57		—			57		57
Total Inventory Acquisition		1,446		1,396		1,391		(5	)		1,397		1,422

2022-23 Mid-year Fiscal Update and Economic Statement 29

Contingency / Disaster and Emergency Assistance

(millions of dollars)

	2021-22		2022-23				Change fr.			2023-24		2024-25
	Actual		Budget		Forecast		Budget			Target		Target
Disaster and emergency assistance contingency
Agriculture, Forestry and Rural Economic Development – wildfires		144		—		116		116			—		—
Agriculture, Forestry and Rural Economic Development – agriculture support		2,886		—		—		—			—		—
Municipal Affairs – (wildfire / flood support)		32		—		1		1			—		—
Service Alberta - 1GX cloud costs		14		—		—		—			—		—
Treasury Board and Finance – unallocated		—		1,000		583		(417	)		750		750
Total disaster and emergency assistance contingency expense		3,076		1,000		700		(300	)		750		750
COVID-19 / Recovery Plan contingency
Operating expense – allocated		—		—		393		393			—		—
Capital grants / inventory consumption - allocated		—		—		171		171			—		—
Treasury Board and Finance – unallocated		—		750		186		(564	)		—		—
Total COVID-19 / Recovery plan contingency expense		—		750		750		—			—		—
Total Contingency / Disaster and Emergency Assistance Expense		3,076		1,750		1,450		(300	)		750		750

Pension Liabilities ^a

(millions of dollars)

	At March 31
	2022			2023			2024			2025
	Actual			Estimate			Target			Target
Teachers’ Pension Plan (pre-1992)		7,244			6,989			6,727			6,459
Teachers’ Pension Plan (post-1992)		—			—			—			—
Public Service Management Pension Plan (pre-1992; closed) b		386			353			320			286
Universities Academic Pension Plan (pre-1992)		226			227			227			227
Special Forces Pension Plan (pre-1992)		85			87			87			86
Members of the Legislative Assembly Pension Plan (closed) b		35			32			30			28
Public Service Supplementary Retirement Plan		25			29			33			37
Provincial Judges and Masters in Chambers Pension Plan		1			1			2			3
SUCH sector – Universities Academic / Supp. Exec. Retirement Plans		269			241			216			191
Total Pension Liabilities		8,271			7,959			7,642			7,317
Annual non-cash change in pension liabilities		(365	)		(312	)		(317	)		(325	)

^a  Numbers for 2023, 2024 and 2025 have been restated to reflect 2021-22 Actual results.

^b  Membership closed and pensionable service no longer being accrued.

Borrowing Requirements

(millions of dollars)

	2021-22		2022-23				Change fr.			2023-24		2024-25
	Actual		Budget		Forecast		Budget			Target		Target
Government		3,715		2,249		—		(2,249	)		—		3,292
Provincial corporations		125		226		81		(145	)		321		174
Government business enterprises		1,513		1,003		1,300		297			504		284
Total borrowing requirements		5,353		3,478		1,381		(2,097	)		825		3,750

Borrowing Sources

(millions of dollars)

	2021-22		2022-23				Change fr.			2023-24		2024-25
	Actual		Budget		Forecast		Budget			Target		Target
Money market (net change)		993		782		—		(782	)		298		598
Public-private partnerships (P3s)		—		81		81		—			39		1
Term debt		4,360		2,615		1,300		(1,315	)		488		3,151
Total borrowing sources		5,353		3,478		1,381		(2,097	)		825		3,750

30 2022-23 Mid-year Fiscal Update and Economic Statement

Cash Adjustments ^a

(millions of dollars)

	2021-22			2022-23						Change fr.			2023-24			2024-25
	Actual			Budget			Forecast			Budget			Target			Target
Retained Income of Funds and Agencies
Alberta Heritage Savings Trust Fund inflation-proofing		(705	)		(494	)		(1,372	)		(878	)		(905	)		(1,638	)
ATB Financial		(586	)		(313	)		(288	)		25			(316	)		(331	)
Agriculture Financial Services Corporation		2,074			(392	)		(389	)		3			(455	)		(531	)
Heritage Foundation for Medical Research Endowment Fund		(153	)		(106	)		60			166			(67	)		(179	)
Heritage Science and Engineering Research Endowment Fund		(88	)		(81	)		31			112			(26	)		(80	)
Heritage Scholarship Fund		(87	)		(78	)		59			137			(3	)		(67	)
Alberta Social Housing Corporation		(3	)		(28	)		(47	)		(19	)		(79	)		(88	)
Credit Union Deposit Guarantee Corporation		(11	)		(15	)		(15	)		—			(16	)		(17	)
Alberta Petroleum Marketing Commission		(2,059	)		329			254			(75	)		137			381
Technology Innovation and Emissions Reduction Fund		(196	)		(75	)		(75	)		—			(77	)		1
Balancing Pool		(96	)		(112	)		(112	)		—			(112	)		(112	)
Other		(31	)		(71	)		(134	)		(63	)		(52	)		(49	)
Total Retained Income of Funds and Agencies		(1,941	)		(1,435	)		(2,028	)		(592	)		(1,971	)		(2,711	)
Other Cash Adjustments
SUCH sector own-source revenue		(4,910	)		(4,979	)		(5,102	)		(123	)		(5,291	)		(5,477	)
SUCH sector own-source expense		5,500			6,413			6,256			(157	)		6,423			6,329
Net deferred capital contribution cash adjustment		249			118			102			(16	)		43			(27	)
Energy royalties (difference between accrued revenue & cash)		(2,418	)		430			1,639			1,209			775			860
Student loans		(271	)		(502	)		(555	)		(53	)		(543	)		(544	)
Other cash adjustments		(264	)		(129	)		227			356			(357	)		(196	)
2013 Alberta flood assistance revenue / expense		(22	)		(12	)		(12	)		—			375			—
Wood Buffalo wildfire revenue / expense		(20	)		(51	)		(37	)		14			57			(4	)
Pension provisions (non-cash expense)		(365	)		(289	)		(312	)		(23	)		(317	)		(325	)
Inventory acquisition		(148	)		(227	)		(142	)		85			(228	)		(230	)
Inventory consumption (non-cash expense)		401			144			311			167			145			144
Total Other Cash Adjustments		(2,268	)		917			2,375			1,459			1,081			530
Capital cash adjustments
Capital investment (excluding SUCH sector self-financed)		(3,492	)		(4,297	)		(4,272	)		25			(3,624	)		(3,186	)
Capital Plan contingency		—			750			750			—			650			650
Current principal repayments (P3s – public-private partnerships)		(83	)		(89	)		(89	)		—			(92	)		(98	)
Direct borrowing for Capital Plan		4,812			224			—			(224	)		—			—
Alternative financing (P3s – public-private partnerships)		43			81			56			(25	)		64			1
Amortization (excluding SUCH sector - non-cash expense)		1,118			1,304			1,256			(48	)		1,332			1,418
Book value of asset disposals (net non-cash expense / revenue)		4			1			2			1			—			—
Total Capital Cash Adjustments		2,402			(2,026	)		(2,297	)		(271	)		(1,670	)		(1,215	)

^a  Negative cash adjustments are a cash requirement; positive cash adjustments are a cash source.

2022-23 Mid-year Fiscal Update and Economic Statement 31

Capital Plan ^a

(millions of dollars)

	2021-22		2022-23				Change fr.			2023-24		2024-25
	Actual		Budget		Forecast		Budget			Target		Target
Advanced Education		583		616		618		2			454		372
Agriculture, Forestry and Rural Economic Development		109		65		69		4			65		88
Children’s Services		—		9		11		2			8		5
Community and Social Services		—		1		2		1			1		1
Culture and Status of Women		35		112		126		14			98		64
Education		759		936		831		(105	)		639		504
Energy		56		75		80		5			222		222
Environment and Parks		95		144		174		30			96		75
Health		927		1,296		1,225		(71	)		1,164		1,267
Indigenous Relations		26		19		32		13			7		5
Infrastructure		221		402		366		(36	)		365		306
Jobs, Economy and Innovation		4		19		19		—			17		11
Justice and Solicitor General		16		23		26		3			18		7
Labour and Immigration		—		1		1		—			1		1
Municipal Affairs		1,708		781		801		20			779		998
Seniors and Housing		138		112		121		9			92		92
Service Alberta		73		245		263		18			198		170
Transportation		1,855		2,656		2,828		172			2,497		2,402
Treasury Board and Finance		14		18		17		(1	)		19		20
Legislative Assembly		3		2		2		—			2		2
Total Capital Plan		6,622		7,534		7,614		80			6,742		6,610

^a  The Capital Plan comprises capital grants included in expense plus capital investment in government-owned assets not included in expense. Capital investment adds to government capital assets, and those assets are depreciated over time through amortization expense included in total expense.

Capital Grants

(millions of dollars)

	2021-22		2022-23				Change fr.			2023-24		2024-25
	Actual		Budget		Forecast		Budget			Target		Target
Agriculture, Forestry and Rural Economic Development		95		50		50		—			49		72
Children’s Services		—		1		3		2			1		—
Culture and Status of Women		34		110		123		13			96		62
Education		11		8		10		2			2		—
Energy		43		58		69		11			205		205
Environment and Parks		35		51		56		5			22		13
Health		5		51		51		—			93		70
Indigenous Relations		26		19		32		13			7		5
Infrastructure		10		16		14		(2	)		16		8
Municipal Affairs		1,702		778		789		11			776		995
Seniors and Housing		70		68		76		8			53		50
Service Alberta		—		150		150		—			100		70
Transportation		472		1,070		1,097		27			1,063		1,331
Total Capital Grants		2,503		2,429		2,520		91			2,484		2,883

32 2022-23 Mid-year Fiscal Update and Economic Statement

Capital Investment

(millions of dollars)

	2021-22		2022-23				Change fr.			2023-24		2024-25
	Actual		Budget		Forecast		Budget			Target		Target
Advanced Education		583		616		618		2			454		372
Agriculture, Forestry and Rural Economic Development		13		15		19		4			16		16
Children’s Services		—		8		8		—			7		5
Community and Social Services		—		1		2		1			1		1
Culture and Status of Women		1		2		2		—			2		2
Education		747		929		822		(107	)		638		503
Energy		13		17		11		(6	)		17		17
Environment and Parks		60		94		118		24			73		62
Health		921		1,245		1,174		(71	)		1,071		1,197
Infrastructure		211		386		353		(33	)		349		298
Jobs, Economy and Innovation		4		19		19		—			17		11
Justice and Solicitor General		16		23		26		3			18		7
Labour and Immigration		—		1		1		—			1		1
Municipal Affairs		6		3		12		9			3		3
Seniors and Housing		68		45		45		—			39		42
Service Alberta		73		95		113		18			98		100
Transportation		1,384		1,586		1,731		145			1,434		1,071
Treasury Board and Finance		14		18		17		(1	)		19		20
Legislative Assembly		3		2		2		—			2		2
Total Capital Investment		4,119		5,105		5,093		(12	)		4,258		3,728

Fiscal Plan and Capital Plan Liability Principal Repayments

(millions of dollars)

	2021-22		2022-23				Change fr.		2023-24		2024-25
	Actual		Budget		Forecast		Budget		Target		Target
Education – Alberta Schools Alternative Procurement P3s		17		18		18		—		19		22
Infrastructure – Evan Thomas water treatment P3		1		1		1		—		1		—
Transportation – ring road P3s		65		70		70		—		72		76
Treasury Board and Finance – debt to reduce pre-1992 TPP liability		—		—		—		—		—		—
Treasury Board and Finance – direct borrowing		3,679		3,207		13,354		10,147		6,700		7,144
Total Principal Repayments		3,762		3,296		13,443		10,147		6,792		7,242

Capital Plan Funding Sources

(millions of dollars)

	2021-22		2022-23						Change fr.			2023-24			2024-25
	Actual		Budget			Forecast			Budget			Target			Target
Capital Plan, less		6,622		7,534			7,614			80			6,742			6,610
10% cash flow adjustment (rounded)		—		(750	)		(750	)		—			(650	)		(650	)
Capital Plan funding requirements		6,622		6,784			6,864			80			6,092			5,960
Source of funding:
Cash received (primarily federal govt.) / donations / disposals		1,065		1,455			1,226			(229	)		1,061			1,126
Retained income of funds and agencies (primarily ASHC)		33		35			(64	)		(99	)		(92	)		(108	)
SUCH sector self-financed		627		808			821			13			634			543
TIER Fund		46		66			66			—			63			58
Alternative financing (P3s – public-private partnerships)		43		81			56			(25	)		64			1
Surplus cash / direct borrowing (in 2021-22)		4,812		4,339			4,759			420			4,362			4,340
Total Capital Plan Funding Sources		6,622		6,784			6,864			80			6,092			5,960

2022-23 Mid-year Fiscal Update and Economic Statement 33

Historical Fiscal Summary, 2008-09 to 2024-25^a

(millions of dollars)

		1			2			3			4			5			6			7			8			9			10			11			12			13			14			15			16			17
		2008-09			2009-10			2010-11			2011-12			2012-13			2013-14			2014-15			2015-16			2016-17			2017-18			2018-19			2019-20			2020-21			2021-22			2022-23			2023-24			2024-25
Statement of Operations																																									Actual			Forecast			Target			Target
	Revenue
1	Personal income tax		8,708			7,877			7,631			8,563			9,621			10,537			11,042			11,357			10,763			10,775			11,874			11,244			11,257			13,335			13,299			13,751			14,683
2	Corporate income tax		4,252			4,754			3,334			3,678			4,756			5,488			5,796			4,195			3,769			3,448			4,871			4,107			3,037			4,718			6,252			6,224			6,623
3	Other tax revenue		3,817			3,746			3,820			4,099			4,333			4,500			4,598			5,168			5,649			6,538			6,833			5,747			5,285			5,453			4,620			5,465			5,817
4	Resource revenue		11,915			6,768			8,428			11,636			7,779			9,578			8,948			2,789			3,097			4,980			5,429			5,937			3,091			16,170			28,124			19,189			15,968
5	Investment income		(1,888	)		3,541			2,486			2,168			2,595			3,423			3,113			2,544			3,698			3,126			2,349			2,828			2,643			3,579			1,195			2,332			3,358
6	Premiums, fees and licences		3,356			2,857			2,922			2,931			3,184			3,437			3,564			3,574			3,701			3,839			3,911			3,929			4,021			4,520			4,756			4,734			4,920
7	Other own-source revenue		4,587			4,627			4,903			5,128			5,234			5,412			6,438			5,850			3,637			6,983			6,292			3,360			3,272			8,952			6,168			6,332			6,204
8	Total own-source revenue		34,747			34,170			33,524			38,203			37,502			42,375			43,499			35,477			34,314			39,689			41,559			37,152			32,605			56,727			64,414			58,027			57,573
9	Federal transfers		4,578			5,342			5,452			5,192			5,042			7,059			5,982			7,142			7,979			7,606			8,013			9,072			10,532			11,595			12,487			11,524			12,291
10	Total Revenue		39,325			39,512			38,976			43,395			42,544			49,434			49,481			42,619			42,293			47,295			49,572			46,224			43,137			68,322			76,901			69,551			69,864
	Expense by Function
11	Health		13,674			14,636			15,393			16,284			17,254			17,967			19,366			20,115			20,687			21,239			21,921			22,408			23,984			25,131			24,761			24,920			25,657
12	Basic / advanced education		10,438			11,067			11,362			11,951			12,394			12,782			13,103			13,673			14,110			14,471			14,848			14,971			14,134			14,296			15,427			15,440			15,597
13	Social services		3,417			3,807			4,129			4,278			4,641			4,668			4,548			4,752			5,198			5,592			5,867			6,203			5,919			5,989			6,952			7,184			7,471
14	Other program expense		10,386			9,834			9,443			9,853			10,528			12,970			11,031			10,375			12,607			13,189			11,866			12,893			13,858			16,686			15,077			13,959			13,597
15	Total program expense		37,915			39,344			40,327			42,366			44,817			48,387			48,048			48,915			52,602			54,491			54,502			56,475			57,895			62,102			62,217			61,503			62,322
16	Debt servicing costs		208			214			472			509			530			601			722			776			1,018			1,420			1,971			2,235			2,486			2,641			2,702			2,750			2,551
17	Pension provisions		2,133			430			439			634			296			748			(404	)		(630	)		(543	)		(593	)		(190	)		(334	)		(282	)		(365	)		(312	)		(317	)		(325	)
18	Total Expense		40,256			39,988			41,238			43,509			45,643			49,736			48,366			49,061			53,077			55,318			56,283			58,376			60,099			64,378			64,607			63,936			64,548
19	Surplus / (Deficit)		(931	)		(476	)		(2,262	)		(114	)		(3,099	)		(302	)		1,115			(6,442	)		(10,784	)		(8,023	)		(6,711	)		(12,152	)		(16,962	)		3,944			12,294			5,615			5,316
Capital Plan b			7,943			8,000			7,544			6,884			6,062			5,770			6,181			6,558			6,578			9,021			6,057			5,545			6,896			6,622			7,614			6,742			6,610
																																							��
Statement of Financial Position (at March 31)
20	Heritage / endowment funds		16,900			17,077			17,500			17,936			18,176			18,562			18,860			19,262			19,836			20,306			20,700			20,670			21,090			22,176			23,445			24,443			26,404
21	Contingency Account		16,822			14,983			11,192			7,497			3,326			4,658			6,529			3,625			2,299			1,661			6,342			—			—			—			—			—			—
22	Other financial assets		28,868			30,338			30,799			32,972			34,734			40,039			40,688			40,990			44,152			49,010			48,701			55,711			56,996			55,950			52,877			49,068			50,418
23	Taxpayer-supported Capital Plan liabilities		(880	)		(2,888	)		(3,199	)		(3,442	)		(4,594	)		(8,724	)		(11,922	)		(19,040	)		(23,769	)		(29,339	)		(33,597	)		(37,188	)		(42,733	)		(47,529	)		(45,917	)		(43,960	)		(43,888	)
24	Taxpayer-supported operating debt / pre-1992 TPP debt		(1,160	)		(2,279	)		(2,015	)		(1,676	)		(1,426	)		(1,333	)		(1,053	)		(1,024	)		(10,751	)		(19,227	)		(29,060	)		(36,954	)		(50,303	)		(45,595	)		(33,909	)		(29,230	)		(27,549	)
25	Self-supported debt		(7,921	)		(9,300	)		(11,010	)		(12,707	)		(14,116	)		(15,775	)		(16,592	)		(17,373	)		(17,822	)		(17,848	)		(18,134	)		(18,066	)		(18,389	)		(17,028	)		(17,373	)		(17,524	)		(17,512	)
26	Total Debt c		(9,961	)		(14,467	)		(16,224	)		(17,825	)		(20,136	)		(25,832	)		(29,567	)		(37,437	)		(52,342	)		(66,414	)		(80,791	)		(92,208	)		(111,425	)		(110,152	)		(97,199	)		(90,714	)		(88,949	)
27	Pension obligations		(10,239	)		(9,483	)		(9,922	)		(10,556	)		(10,852	)		(11,600	)		(11,196	)		(10,566	)		(10,023	)		(9,430	)		(9,240	)		(8,918	)		(8,636	)		(8,271	)		(7,959	)		(7,642	)		(7,317	)
28	Other liabilities		(10,689	)		(11,131	)		(11,692	)		(11,033	)		(10,793	)		(12,795	)		(12,260	)		(11,955	)		(12,823	)		(14,477	)		(13,189	)		(15,399	)		(17,553	)		(16,669	)		(17,188	)		(16,334	)		(16,677	)
29	Net Financial Assets / (Debt)		31,701			27,317			21,653			18,991			14,455			13,032			13,054			3,919			(8,901	)		(19,344	)		(27,477	)		(40,144	)		(59,528	)		(56,966	)		(46,024	)		(41,179	)		(36,121	)
30	Capital / non-fin. assets (less def. cap. contributions starting 2012-13)		30,275			34,217			37,607			40,122			39,517			40,839			42,197			44,623			46,622			49,015			50,744			51,570			53,767			55,053			56,405			57,175			57,433
31	Net Assets d		61,976			61,534			59,260			59,113			53,972			53,871			55,251			48,542			37,721			29,671			23,267			11,426			(5,761	)		(1,913	)		10,381			15,996			21,312
Energy prices and exchange rate
32	Oil price (WTI US$/bbl)		85.94			70.71			83.38			97.33			92.07			99.05			80.48			45.00			47.93			53.69			62.77			54.85			42.32			77.03			91.50			78.50			73.50
33	Heavy oil price (WCS @ Hardisty; Cdn$/bbl)		74.36			66.08			66.70			80.72			68.48			80.11			70.78			40.86			44.67			50.38			51.65			53.14			41.42			79.63			95.00			79.30			68.50
34	Natural gas price (ARP; Cdn$/GJ)		6.97			3.58			3.28			2.98			2.28			3.28			3.51			2.21			2.01			1.82			1.34			1.39			2.10			3.48			5.40			4.40			3.80
35	Exchange rate (US¢/Cdn$)		89.6			91.9			98.4			100.7			99.9			95.0			88.0			76.5			76.2			78.0			76.3			75.2			75.7			79.8			75.2			76.3			78.2

^a  Numbers are not strictly comparable due to numerous accounting policy changes over time. 2019-20 expense by function have been re-classified following re-organizations and other adjustments.

^b  Reflects capital grants and other support included in expense, and capital investment in government-owned assets not included in expense. Capital investment adds to capital assets, which are depreciated over time through amortization expense. Numbers for 2008-09 to 2013-14 are estimates as details required to consolidate SUCH sector capital spending with full accuracy are not readily available.

^c  Does not include capital lease liabilities, or debt issued on behalf of government business enterprises which is reported on a net equity basis in Other Financial Assets.

^d  The change in net assets / (debt) year over year does not match the surplus / (deficit) exactly in most years, due to various balance sheet adjustments, most of which are minor. A significant adjustment reducing net assets by $2 billion was made in 2012-13, to recognize the accumulated deferred capital contribution liability when the accounting standard was adopted.

34 2022-23 Mid-year Fiscal Update and Economic Statement

Reporting Methodology and Legislative Compliance

Method of Consolidation

The 2022-23 Mid-year Fiscal Update and Economic Statement reports on the same scope, using the same method of consolidation, as presented in Budget 2022. This is also the same scope and consolidation approach used in the Consolidated Financial Statements in the Government of Alberta Annual Report.

The results of all government departments, funds and agencies, except those designated as government business enterprises, are consolidated on a line-by-line basis. Revenue and expense transactions between consolidated entities have been eliminated.

The accounts of provincial agencies designated as government business enterprises are included on the modified equity basis, computed in accordance with International Financial Reporting Standards applicable to those entities.

Basis of Financial Reporting

The consolidated fiscal summary reports revenue (including gains from disposal of tangible capital assets), expense (including amortization, inventory consumption, loss on disposal and write-down of tangible capital assets), and surplus / (deficit).

Revenue and expense are recorded using the accrual basis of accounting. Cash received for goods or services which have not been provided by period end is recorded as unearned revenue.

Transfers received for capital purposes, and donated capital assets, are recorded as “deferred capital contributions” when the cash or asset is received, and recognized in revenue over the related asset’s useful life (in effect matching the asset’s amortization expense).

Expense includes the province’s cash payments towards the unfunded pension liabilities, and the non-cash change in unfunded pension liabilities.

Debt servicing costs include interest payable, and amortization of issue costs and discounts / premiums on debt issues.

Compliance with Legislation

The Fiscal Planning and Transparency Act (FPTA) requires a report to be published on the accuracy of the Fiscal Plan for a fiscal year on or before November 30. The FPTA gives the President of Treasury Board and Minister of Finance discretion over the form of the report.

The 2022-23 Mid-year Fiscal Update and Economic Statement includes comparisons between the Budget 2022 estimates and second quarter forecasts for revenue and expense (including details and categories of each); the surplus / (deficit); cash adjustments and balance; a summary balance sheet; the Capital Plan; and borrowing requirements and sources. An updated Alberta economic outlook, with associated assumptions, is also provided.

The forecast provided in this report is in compliance with the requirements of the FPTA.

2022-23 Mid-year Fiscal Update and Economic Statement 35