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The province’s total revenue is estimated at $38.4 billion, down $11.5 billion from the budget. That almost 80 per cent drop is attributed to lower income taxes, resource revenue and net income from gaming.
Meanwhile expenses increased by $5.3 billion largely due to COVID recovery plans and other stimulus.
Real Gross Domestic Product (GDP) is forecasted to shrink 8.8 per cent to approximately $314 billion, the largest annual decline in modern day history. Employment is forecasted to fall a record 7.0 per cent and the unemployment rate to average 11.6 per cent.
Toews warned that while the outlook will improve slightly next year, full recovery of the province will not happen quickly.
“While the economy is expected to see a partial rebound of 4.6% next year, the road to recovery will be slow and fragmented. Real GDP is not expected to surpass 2019 levels until after 2022 and employment is unlikely to fully recover until after 2021,” he said.
Resource revenue dropped to $1.2 billion, a level not seen since the early 1970s and $3.9 billion lower than was in the original budget.
The government has also adjusted its expectations for oil prices. The forecast prior to the pandemic estimated West Texas Intermediate (WTI) oil would average US$58 a barrel.
After both WTI and Western Canadian Select briefly fell into negative territory in April, the government now forecasts US$35.60 per barrel for 2020-21.
“Bitumen royalties of $686 million are forecast, $2.5 billion lower than budget, while crude oil royalties are forecast to be $316 million, down $819 million,” the fiscal update document says.