Alberta expects 9% spending cut in next budget
To do nothing would add $20 billion in debt over the next three years just to run the government, finance minister says.
EDMONTON — Alberta Finance Minister Robin Campbell says the cuts in the next budget will be wide and they will be deep.
“We’re probably in the neighbourhood of 9% reductions for ’15-’16,” Campbell told a legislature news conference Wednesday.
Campbell said the government is looking at 5% cuts to departmental spending.
But he said given that the province also won’t match the rate of inflation, plus population growth – which is almost 4% – the result is a 9% cut.
He says to do nothing would add $20 billion in debt over the next three years just to run the government.
“We’re not about to see that happen,” said Campbell, standing alongside Premier Jim Prentice.
“We will make the tough decisions we have to in reducing government spending by department.”
Campbell will introduce the budget in the legislature next month. No exact date has been set.
Prentice has said the precipitous slide in oil prices over the last six months has left a $7-billion hole in the treasury that needs to be fixed now and for the future.
He said he wants to get Alberta’s day-to-day spending off the roller-coaster of oil prices, and said next month’s budget will also include a long-term financial blueprint.
Campbell and Prentice said despite the cuts, they still expect to run deficits over the next few years.
“We’ve heard from Albertans loudly and clearly that they wish to see core services maintained … health care, education, taking care of seniors and children,” said Prentice.
The premier has said many options are being considered to fix Alberta’s economic model, including changes to the 10% flat tax on personal income.
He has also said public sector wages are unsustainable, but won’t say if he is asking for rollbacks or layoffs.
Prentice has ruled out a sales tax, hikes to corporate income taxes and changes to oil royalties, saying those would cause more harm than help.
Also Wednesday, Prentice said he is directing a Tory-dominated all-party committee to meet again to reverse a decision to refund $546,000 returned to the auditor general from cuts in this year’s budget.
Opposition members said that once again, as in the oil trough of the 1990s, Albertans will pay for the Tories’ failure to follow through on their longstanding promise to wean day-to-day spending off resource revenues.
“Everything is deja vu all over again,” said Liberal Laurie Blakeman.
“There is an alternative. There are all kinds of revenue streams that have been outlined that the government can take advantage of.”
NDP Leader Rachel Notley said a 9% is “just the wrong way to go.
“This government has squandered the unprecedented prosperity that this province has had over the last decade,” she said.
“They need to explain that to people, but they do not need to make regular Albertans, their kids (and) their parents, pay the cost of their failures.”
© 2015 The Canadian Press