Finance Minister Doug Horner had originally forecast a $451-million deficit on day-to-day operational spending, but he said Wednesday that higher-than-expected oil prices, along with a low Canadian dollar, have changed the economic outlook.
"We're turning the corner," Horner told a legislature news conference as he delivered his third-quarter budget update for 2013-14.
"But we know that we must still be careful about what lies ahead. We need to be ready for what we can't see around that corner. We all know how much our revenues can fluctuate in a short period of time."
Horner said given the volatility in oil and gas prices, the province will continue to hold the line on spending when he brings down the 2014-15 budget on March 6.
"We will deal with the pressures that come from a rapidly growing population, but we're not opening up the spending taps. Today's surplus will be used to cushion future drops in revenue."
Horner said this year's projected surplus will be added to the province's Contingency Fund, bringing it to $4.6 billion.
Wildrose critic Rob Anderson accused Premier Alison Redford's team of "jiggery-pokery" to hide a consolidated deficit this year of $3.5 billion.
"The minister says we've turned the corner. We've not turned the corner," said Anderson.
He said the government split the day-to-day spending from the capital spending starting last year to deflect attention from the billions the Tories are borrowing despite a roaring economy and a population boom.
"They continue to march us down the path of more wasteful spending, more deficits, more debt and more danger if things do not continue to go as well as they are from a revenue perspective," said Anderson.
"We are really setting ourselves up in this province for a huge, huge fall."
NDP Leader Brian Mason agreed that the the extra oil revenues only proved Redford's team "are lucky idiots who couldn't run a lemonade stand."
Mason said by tying daily spending to the "yo-yo" world of resource prices, the government is harming everyday Albertans.
He pointed to the current fiscal year when Redford underfunded programs and slashed spending to deal with the projected operational deficit, leading to cuts and layoffs, only to announce a $1.4-billion surplus.
"For this government, budgeting is really just throwing the dice," Mason said. "If oil and gas prices are high (and) the dollar is low, they cash in. Otherwise, the rest of us pay the price."
He said the government needs to get off the revenue "roller-coaster" by changing the 10 per cent flat tax on personal income to something more fair and progressive.
Liberal Leader Raj Sherman said Horner is socking money away that could be used to solve real problems by investing in long-term care beds and reducing surgery wait times.
"To fix the (health) system, we need to get people out of the (health) system," said Sherman.
Operational revenue for the first nine months of the year was $30.8 billion, which was $2.7 billion higher than expected.
Operational spending was $29.6 billion, about $1.1 billion higher than forecast due to emerging costs from the extensive flooding that hit Calgary and parts of southern Alberta last June.
Resource revenue hit $6.7 billion — about $1.4 billion more than forecast.
So far, the province has committed $1.2 billion to help small businesses and communities recover from the floods. That goes along with $537 million in operating expenses and $33 million in capital outlays
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