Alberta’s finance minister says the provincial economy is looking up next year, but the Province will start looking for ways to reduce spending and labour costs to eventually balance its books.
Finance Minister Joe Ceci said in a second-quarter fiscal update last week that Alberta’s economy is looking up and the government will take steps to reduce spending, while protecting front-line services.
He said the government made the right choice to support Albertans through the recession, rather than making “knee jerked” cuts that could have hurt the provincial economy more.
“Our choice to lead the recovery, rather than follow the recession means we kept building the province rather than neglect our growing population,” said Ceci in a Nov. 28 press conference. “Rather than give people pink slips, we gave them hammers, lab coats and laptops.”
The Province forecasts Alberta’s economy will grow by four per cent in 2017, up from a forecasted 2.6 per cent growth rate predicted in the 2017 budget earlier this year. Ceci said economic forecasts project Alberta will lead the country in economic growth in 2018. As well, he said Alberta has seen 70,000 more full-time jobs since mid-2016, most of them being in the private sector.
The provincial deficit is now projected to be $10.3 billion, $200 million less than anticipated in this year’s budget. Total expenses are now expected to come in at $54.7 billion, $180 million lower than budgeted.
Ceci said the Province is on path to balance the budget by 2023.
“Our plan to balance is to carefully reduce spending while protecting core services, and we’re doing just that,” he said. “We’re on track to find $400 million in savings this year without firing thousands of teachers and nurses. In addition, we have found $500 million in the two previous years while protecting services Albertans rely on.”
The Province is implementing a hiring freeze to reduce the size of government payroll through attrition. The Province is also looking to unions to keep salaries in line. The Province is also extending a salary freeze, begun in early 2016 for management and non-union employees, by an additional 18 months.
Highwood MLA Wayne Anderson said the NDP government hasn’t shown any fiscal restraint so far in its mandate and its financial strategies have been a disaster.
“They should’ve been carefully started restricting their spending from the beginning,” he said.
Anderson is concerned about the impact the Province’s debt will have.
He said Alberta’s mounting debt will be a problem for the government and for Albertans for years to come.
He said the Province hasn’t shown Albertans a clear path for how it intends to balance the budget by 2023.
A day after the budget update, Toronto-based DBRS Limited downgraded Alberta’s long-term debt rating from AA (high) to AA with a negative outlook.
Anderson said this is the consequence of the government’s poor fiscal decisions.
“This is now the sixth downgrade,” he said.
The downgrade will mean another half-billion dollars in interest payments, said Anderson.
“This is a disaster and there’s still no plan in place to restore financial accountability or repay any portion of the debt,” he said.