Premier addresses fiscal issues facing province
Alberta: Redford says government will hold the line on spending in 2013 budget
By: Don Patterson
| Posted: Monday, Jan 28, 2013 06:28 pm
Albertans are bracing for potential cuts in this year’s provincial budget after Premier Alison Redford announced last week a $6 billion shortfall in provincial revenues.
A day after making a province-wide televised address on the state of Alberta’s finances on Jan. 24, Premier Alison Redford told the Western Wheel the government is facing some tough choices.
“Certainly we’re not going to shy away from that, we’re going to have to take a look at what this means and know that kind of spending on growth is going to be a challenge for us,” she said.
While Redford offered few details of what Albertans can expect to see when the budget is unveiled in March, she said the Province will hold the line on spending.
Redford said the government is looking at changes to some programs and services, particularly those that aren’t sustainable in the long-term.
“We’re looking very critically at everything we can do to make sure we’re spending every tax dollar wisely and we’re accountable to it in a responsible way,” she said.
According to Redford, the Province is facing a $6 billion shortfall because of a widening gulf between market value for oil and what Alberta is actually getting on the open market. The $6 billion shortfall amounts to what the Province spends on education each year, she said.
A year ago the forecasted price for oil was $100 per barrel, but Redford said Alberta’s bitumen has been selling for just over $50 per barrel for a number of reasons, such as insufficient pipeline networks to get it to other markets and the U.S. becoming less dependent on other countries for its domestic oil needs.
Redford said the although there may be cuts in the 2013 budget the Province will continue to invest in infrastructure necessary to accommodate growth in Alberta.
In addition, she said the Province will work to maintain its funding commitments to municipalities through programs like the Municipal Sustainability Initiative (MSI).
“We understand that MSI is fundamental to communities for doing exactly the same kind of work on infrastructure spending that we’re talking about at the provincial level,” she said.
She also announced the Province intends to invest part of its resource revenues in the Heritage Fund for the first time in 25 years.
Highwood MLA Danielle Smith said the premier’s televised address lacked details about how she planned to deal with the revenue shortfall.
“We were expecting to hear something new, we were expecting to hear some leadership and vision about how the premier was intending to balance the budget,” she said.
She said the Province can’t expect to maintain spending and not raise taxes and still be able to live within its means. She said she expects to see Alberta end up back in debt.
She said the bitumen differential is nothing new and the situation won’t be resolved in the near future.
“Any of these pipelines are not going to materializes for three or four or five years or longer,” she said.
Ultimately, she said the problem is spending, not revenues.
Local leaders are hoping foothills communities won’t be hit too hard by potential cuts.
Okotoks Mayor Bill Robertson said he wants the provincial government to follow through on MSI commitments for projects that have already been approved, particularly the Foothills-Okotoks Field House.
The Town is expecting to use funding from the program for the next three years to pay its $10 million share of the project’s cost.
While he doesn’t expect it would be cut, he said the Town would be left in a difficult spot if the provincial funding didn’t come through.
“We’re committed to that and we were assured we could do that by the provincial government,” he said. “If they were to cut that funding then that would leave us between a rock and a hard place.”
He said he would rather see programs like the Green Trip grant program for transit projects delayed, rather than cut. The Town was hoping to use the program to help pay for commuter transit service to Calgary.
He said Alberta financial situation may also mean the Province may not end up providing financial assistance with buying water licenses as hoped.
Livingstone Macleod MLA Pat Stier said communities across his riding are relying on provincial government help for a number of different projects. In particular, he said there are a number of facilities, such as senior’s homes in need of repairs and he questions if the Province will have to money to pay for them.
“We do need to see a lot of improvements there and maintenance has to be maintained,” he said. “Are we going to see this fall off to the wayside now? That’s what I’m worried about in Livingstone Macleod.”