Saskatchewan’s budget is a few weeks away but Alberta’s new budget, which was delivered last week, could be somewhat informative about what to expect.
As we watch oil prices rise as global demand increases and supplies, such as Russia’s, are called into question, this is particularly bullish for the treasuries of oil-producing provinces.
In Alberta, it turns out the improved royalties flowing from stronger oil prices provided an $18 billion turn around as it delivered its first balanced budget in 7 years.
Oil royalty revenues rose $11 billion compared to last year, enough to generate a half-billion-dollar surplus.
While Alberta is the big oil producer, Saskatchewan has significant petroleum assets, too, but we also have potash, something Alberta does not enjoy.
Global demand of this fertilizer is rising as fast or faster than oil demand as Russia and Belarus are also big suppliers and the Ukrainian invasion has some customers rethinking their relationship.
If Alberta is any indication, Saskatchewan is probably going to see significant revenue growth as well, bringing the prospect of a balanced budget closer than original estimates.
