Alberta government set to bring down lean budget as falling oil hits bottom line

Associated Press

EDMONTON - It's budget day in Alberta, and Premier Alison Redford says that while lean times are ahead, there won't be any tax hikes.

Redford says falling oil prices mean that the level of spending won't even match the four per cent needed to keep pace with inflation and population growth.

She says the budget also sets a new tone on how the government views finances.

She says recent budgets have been shortsighted, focusing on deficits and surpluses, red ink and black ink, rather than taking a longer view of building a province.

The new budget will detail spending on capital projects, spending on day-to-day operations, and on a savings plan.

Redford says it's important to focus on all three areas to construct a financial framework that gets the province off the roller-coaster of rising and falling oil and gas revenues.

"It's important for us to be able to build a province for the long term," said Redford.

"We have seen for the last 15 years in this province what I think is a pretty parochial debate about words like debt and deficit.

"When you're running a $40-billion budget, there are a lot of issues that need to be balanced ... (and) I think it's incredibly short term and not in the long-term interest of the province to make decisions around capital planning and infrastructure that if there is not cash on the barrel head, you can't build."

But Redford has cautioned that a pipeline bottleneck and a glut of oil in the United States is taking a toll on the provincial purse.

She has said the government expects to take in just half of the $13-billion it was hoping to get in the coming year from non-renewable resources.

To make up that shortfall, Redford says her government is re-examining budget priorities and streamlining programs to avoid cuts to front-line service.

NDP Leader Brian Mason calls that wishful thinking.

"What I do know is they're going to bring in a budget that is starkly different from what they promised in the election. I would say they stole the (2012) election by lying about what was ahead," said Mason.

Mason said he expects cuts to health and education to go with layoffs of public sector workers.

Wildrose Leader Danielle Smith noted Redford promised in 2012 to balance the budget but has already started borrowing heavily to pay for infrastructure, like the twinning of the highway to Fort McMurray.

"(Redford) can't make ends meet, so she's going to plunge us back into debt and make our kids and grandkids pay for the spending promises of today. I don't think that's right," said Smith.

Liberal Leader Raj Sherman urged the premier to move away from the current 10 per cent flat tax on income to a progressive system.

"A progressive income tax and a 12 per cent tax on large corporations will bring in the $2.7 billion in revenue that's deeply required for this province," said Sherman.

"We simply cannot continue and budget this way."

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