GOVERNMENT OF ALBERTA Annual Report Government of Alberta 2019-2020 • Budget 2019 Key Results • Consolidated Financial Statements • Measuring Up This is the report to Albertans on Budget 2019: A plan for jobs and the economy. It is a permanent public record of the revenue, expense and results achieved by the Government of Alberta for the 2019 –20 fiscal year. The Government of Alberta 2019 –20 Annual Report consists of three parts: • Budget 2019 Key Results, which provide a description and variance analysis of government’s revenue, spending, assets and liabilities. • Consolidated Financial Statements, which provide an overall accounting of the government’s revenue and spending, and assets and liabilities. • Measuring Up, which reports on the progress that has been made towards achieving the government’s goals. Annual reports for each ministry have also been published, providing additional detailed information on performance and financial results. Copyright © 2020 Government of Alberta 2019 –20 Annual Report ISBN 978-1-4601-4812-9 (PDF) ISSN 2291-6431 (online) www.alberta.ca Preface The Public Accounts of Alberta are prepared in accordance with the Financial Administration Act and the Fiscal Planning and Transparency Act. The Public Accounts consist of the Annual Report of the Government of Alberta and the annual reports of each of the 20 ministries. This Annual Report of the Government of Alberta contains Budget 2019 Key Results, the audited Consolidated Financial Statements and Measuring Up, which compares actual performance results to desired results set out in the government’s strategic plan. The annual reports of ministries are released concurrently with the Annual Report of the Government of Alberta. The ministry annual reports contain the financial information of the ministries and a comparison of actual performance results to desired results set out in the ministries’ business plans. Each ministry annual report also includes: • Financial statements of entities making up the ministry which includes regulated funds, provincial agencies and Crown-controlled corporations for which the minister is responsible; • Other financial information as required by the Financial Administration Act and the Fiscal Planning and Transparency Act, as separate reports, to the extent that the ministry has anything to report; • Financial information relating to accountable organizations and trust funds. Government of Alberta | Annual Report 2019 – 2020 1 Table of Contents Preface ............................................................... 1 Table of Contents ...................................................... 2 Budget 2019 Key Results . 5 Financial Highlights .................................................... 7 Fiscal Summary ........................................................ 7 Revenue Highlights ..................................................... 8 Expense Highlights ..................................................... 9 Statement of Financial Position ............................................ 10 Financial Indicators and Risks ............................................. 11 Historical Fiscal Summary 2008-09 to 2019-20 ................................ 12 Consolidated Financial Statements of the Province of Alberta . 13 Table of Contents ...................................................... 15 Management’s Responsibility for the Consolidated Financial Statements ............. 17 Independent Auditor’s Report ............................................. 18 Consolidated Statement of Operations ...................................... 21 Consolidated Statement of Financial Position ................................. 22 Consolidated Statement of Change in Net Debt ............................... 23 Consolidated Statement of Cash Flows ...................................... 24 Notes to the Consolidated Financial Statements ............................... 25 1 Summary of Significant Accounting Policies and Reporting Practices ......... 25 2 Valuation of Financial Assets and Liabilities ............................ 33 3 Financial Risk Management and Derivatives ............................ 34 4 Contractual Rights ............................................... 37 5 Contingent Assets ................................................ 37 6 Contractual Obligations and Commitments ............................ 38 7 Contingent Liabilities ............................................. 39 8 Trust and Other Funds Under Administration .......................... 41 9 Subsequent Event ................................................ 42 10 Comparative Figures .............................................. 42 2 Government of Alberta | Annual Report 2019 – 2020 Table of Contents Schedules to the Consolidated Financial Statements ............................ 43 1 Revenues ...................................................... 43 2 Revenues by Source by Ministry ..................................... 44 3 Expenses by Object by Ministry ..................................... 45 4 Cash and Cash Equivalents ......................................... 46 5 Accounts Receivable .............................................. 46 6 Portfolio Investments ............................................. 47 7 Endowment Funds ............................................... 48 8 Equity in Government Business Enterprises ............................ 49 9 Loans and Advances .............................................. 56 10 Accounts Payable and Other Accrued Liabilities ......................... 57 11 Debt .......................................................... 57 12 Pension Plans and Other Defined Benefit Plans ......................... 62 13 Deferred Contributions ........................................... 68 14 Tangible Capital Assets ............................................ 69 15 Adjustments to Net Assets ......................................... 70 16 Over-expenditure of Spending Authorities ............................. 71 17 Listing of Organizations ........................................... 72 Glossary (Unaudited) .................................................... 77 Measuring Up . 84 Management’s Responsibility for Reporting ................................... 84 Executive Overview ..................................................... 85 Measuring Up 2020 Reader's Guide ........................................ 87 Priority One: Getting Alberta back to work ................................... 89 Priority Two: Making life better for Albertans ................................. 105 Priority Three: Standing up for Alberta ...................................... 120 Performance Indicators – Sources and Notes .................................. 127 Government of Alberta | Annual Report 2019 – 2020 3 BLANK PAGE 4 Government of Alberta | Annual Report 2019 – 2020 Budget 2019 Key Results Government of Alberta | Annual Report 2019 – 2020 5 Table of Contents Budget 2019 Key results Financial Highlights ................................................. 7 Fiscal Summary ..................................................... 7 Revenue Highlights .................................................. 8 Expense Highlights .................................................. 9 Statement of Financial Position. 10 Financial Indicators and Risks. 11 Historical Fiscal Summary, 2008-09 to 2019-20. 12 6 Government of Alberta | Annual Report 2019 – 2020 Financial Highlights A budget was not passed prior to Alberta’s general Change from Budget. Decreases of $2.6 billion election, held April 16, 2020. Special warrants were from GBEs, $0.8 billion in taxes, $0.6 billion in used to continue operations. Following the election, resource revenue and $0.1 billion in federal transfers a blue ribbon panel - the MacKinnon Panel - was were partly offset by $0.4 billion in increased commissioned to review the government’s finances, investment income and other revenue. delaying Budget 2019 until October. An updated Total Expense was $58.4 billion, up $2.1 billion 2019-20 forecast was included in Budget 2020, from 2018-19, but down $0.3 billion from budget. which was tabled in February, 2020. On March 11, 2020 the World Health Organization declared Change from 2018-19. Increases of $0.6 billion in a global pandemic. COVID-19 has significantly health expense, $0.4 billion in social services, $0.8 impacted Alberta and the 2019-20 results. billion in crude-by-rail, and $0.4 billion in debt servicing costs and other expense, were partly offset The deficit in 2019-20 was $12.2 billion. This was by a $0.1 billion increase in pension recoveries. $5.4 billion higher than the 2018-19 deficit, and $3.4 billion more than estimated in Budget 2019. Change from Budget. Increases of $0.3 billion in health, $0.3 billion in education, were partly Total Revenue was $46.2 billion in 2019-20, a offset by a decrease of $0.1 billion in social services, decrease of $3.3 billion from 2018-19, and down $0.6 billion in crude-by-rail and $0.2 billion other $3.7 billion from budget. expense. Change from 2018-19 . Decreases of $2.8 billion Net Financial Debt. At March 31, 2020, net from government business enterprise net income financial debt was $40.1 billion, an increase of (GBEs) and $2.6 billion in taxes and other revenue, nearly $13 billion from March 31, 2019. were partly offset by increases of $1.1 billion in federalpdf named: government 2019-20_AR-ExSumm_T01_fs.pdf transfers, $0.5 billion in resource 2019-20, GoA Annual Report revenue and $0.5 billion in investment income. Fiscal Summary Fiscal Summary (millions