Francois Legault is lucky. When he is re-elected “very likely” next fall, he will once again be confident that Alberta will fill Quebec’s treasury with a federal balance, thanks in large part to Alberta petrodollars.
Capitalizing on the sharp rise in revenue from its oil resources following the explosion in the price of a barrel of oil and the extension of gasoline at the pump, Alberta ended its most recent 2021-22 fiscal year with a surprise surplus of $3.9 billion.
This represents a spectacular fiscal turnaround, as Jason Kenney’s Alberta government had instead forecast a deficit of $3.2 billion for this fiscal year.
Resource revenue (oil, natural gas) reached US$16.2 billion, or US$13.3 billion more than revenue projected at the time Alberta’s 2021-22 budget was presented.
And even more…
To show the magnitude of this $16.2 billion in revenue Alberta derives from its oil and natural gas resources, it should be noted that it is nearly six times Hydro Quebec’s $2.73 billion dividend. dollars raised by the Legault government during the 2021-22 fiscal year.
The gap is even larger when Alberta’s revenues include taxes paid by oil companies to the Alberta government.
This is the first time in seven years that Alberta has returned to its former profitability, which confirms Alberta as the richest province in the country with a GDP per capita of $80,546 in 2019, the year before the pandemic began.
In comparison, Quebec’s GDP per capita was only $54,125, or $26,421 less than Alberta. Quebec ranks 6th in Canada.
The other four provinces richer than Quebec are: Saskatchewan with a per capita GDP of $71,067, Newfoundland-Labrador ($67,599), Ontario ($61,344) and British Columbia ($61,018).
These five provinces, richer than Quebec, are not eligible for the federal equalization manna, whose tax transfer program allows wealth to be evened out between the provinces and territories of the Canadian federation.
With a budget of US$21.9 billion, this equalization program grants the five “poorest” provinces sufficient revenue to enable them to deliver public services at a quality and tax level broadly comparable to the wealthy provinces .
Quebec benefits the most from the federal balance. The Legault administration raised about $13.1 billion in compensation payments in the most recent 2021-22 fiscal year, or nearly 63% of the total manna offered by Justin Trudeau’s administration.
Prime Minister Legault may say that he sees Alberta oil as “dirty energy” and that he doesn’t want it flowing through Quebec, it must be admitted that Quebec benefits greatly from the offset.
On the other hand, from an environmental point of view, it is evident that Hydro-Québec represents a much better collective investment than Alberta’s oil production.