Mid-year update: Strong economic recovery continues

Alberta’s fiscal outlook continues to improve along with the economy as revenue increases, the government holds the line on spending and the deficit drops.

According to the mid-year update, the province continues to see strong improvements in the economy, confirming that Alberta’s Recovery Plan to support job creation and broaden the economy is working.

Drilling activity and oil production have increased while business output remains solid, with manufacturing shipments and non-energy exports up more than 20 per cent year-to-date.

Housing activity and retail spending also continue to be robust. Private sector construction spending is also picking up and employment will continue to improve.

Alberta has gained more than 103,000 jobs since the start of the year. According to the October jobs report, the unemployment rate fell to 7.6 per cent. Overall, it is forecast to average 8.8 per cent this year, down from 11.4 per cent in 2020. It is forecast to drop to 5.7 per cent in 2024.

The Job Creation Tax Cut and continued efforts to make Alberta the most competitive business environment in North America are working. Corporate income tax revenue of $2.9 billion is forecast for 2021-22, $1 billion more than what was forecast in February’s budget. This revenue is now forecast to increase by an average of 19 per cent over the next two years to reach $4.1 billion in 2023-24 as growth in investment and profits continue.

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