Photo: The Canadian Press

Alberta Finance Minister Travis Toews

Alberta Finance Minister Travis Toews says COVID-19 will affect the province's economy for the next couple of years and perhaps beyond, but projections are encouraging.

“COVID-19 has created an environment of uncertainty, not just here in Alberta but around the world,” Toews said Tuesday as he announced updated numbers for his current budget.

“I can’t say whether the worst days are behind us in this pandemic. (But) I’m hopeful when I see signs of economic recovery out there. We’re doing all we can to position Alberta for recovery.”

Toews said the revised budget deficit this year will be $21.3 billion.

That’s $2.8 billion less than projected at the first update in August, but still exponentially larger than the $6.8-billion deficit announced when Toews first presented the budget in February.

Since then, Toews said Alberta’s economy has been hit by the “triple black swan”: the COVID-19 pandemic, the drop in oil prices due to an international price war, and a global economic contraction.

But he said the updated revenue forecast for the current budget is $41.4 billion, almost $3 billion higher than last quarter due to improved forecasts for resource and gaming revenues, investment income and federal transfers.

Expenses are pegged at $62.7 billion, up $5.4 billion due to compensation and health-care initiatives responding to the COVID-19 crisis.

Taxpayer-supported debt is pegged to hit $97.4 billion by the spring and $125 billion by 2023.

Total spending to fight COVID-19 and for pandemic recovery efforts is forecast to be $4.8 billion this year and an estimated $1.8 billion for the two years after that.

Revenue from non-renewable resources is forecast at $1.7 billion, down $3.4 billion.

Toews said there are encouraging signs, but it will be a long path to full recovery. Real GDP, a measure of a jurisdictions’ total economic output, is expected to fall to 8.1 per cent rather than the expected 8.8 per cent this year and won’t recover to 2014 levels until 2023.

Real GDP is expected to grow 4.4 per cent in 2021.