Finance Minister forecasts over $3.5 billion deficit for Alberta
Posted Feb 19, 2013 3:46 pm.
This article is more than 5 years old.
CALGARY _ The Alberta government’s bottom line continues to bleed red ink and the province is planning job cuts and a wage freeze for civil-service managers to try to stem the flow.
Tory Finance Minister Doug Horner announced plans Tuesday for a three-year management salary freeze. It is to begin April 1 and is expected to save taxpayers $54 million.
The government is also reducing the number of public-sector managers by 10 per cent, or about 480 positions, over that same time period, he said. While some positions are vacant and won’t be filled, there will be some people who lose their jobs.
“Alberta is continuing to face serious challenges to our bottom line,” Horner said as he released the province’s third-quarter fiscal update.
`Alberta is dealing with rapidly falling resource revenues and it means we’re making some tough decisions.”
Horner said in the first nine months of the 2012-13 fiscal year, resource revenue was $2.4 billion lower than expected.
Alberta is now forecasting a deficit of between $3.5 and $4 billion at least four times what was originally predicted in the last budget.
Horner said lower resource revenue expectations have been partially offset by $600 million in savings across ministries and higher-than-expected corporate income tax, stronger investment income and higher revenue from gaming and liquor sales.
The management cuts were not enough for the Opposition Wildrose party. Leader Danielle Smith suggested middle management ranks need to be thinned by half.
“It seems to me with what they’re putting forward here that this is window dressing,” she said. “The budget that was put forward last year is totally unravelling. We knew it did not contain projections that were remotely achievable.”
The Liberals concurred.
“It’s like putting your finger in the dike and hoping the problem goes away,” said Liberal member Kent Hehr. “Really it’s running around, pretending you’re doing something when you’re not dealing with the real issue.”
Alberta’s next budget is to be delivered March 7.
Premier Alison Redford had warned there will be tough choices required, but has ruled out tax increases or a provincial sales tax.
She’s coined the term bitumen bubble to refer to the difference between the benchmark prices for oil in North America and the amount Alberta receives for its land-locked oilsands bitumen.
Horner echoed that tough-budget message and didn’t rule out further job cuts.
“Nothing is off the table,” he said. “The upcoming provincial budget focuses on making the tough but thoughtful decisions necessary to allow the province to continue to deliver on its priorities.”
Smith is not expecting to be pleased.
“We don’t know what to expect on March 7,” she said. “But we know it won’t be pretty.”
