Canada's 'richest province' is now an indebted province and will be for the foreseeable future.
On Thursday, Alberta's government tabled their 2013 budget and it's a tough one to swallow.
On the revenue/expense tallies some of the 'highlights' include no new taxes along with nominal increases in spending for healthcare and K-12 education. There are also significant spending cuts specifically with senior programs, post-secondary funding and policing. There's also zero monies allocated for increases for public sector salaries.
Despite the somewhat austere nature of the budget, the operational deficit — due to declining oil and gas revenues — will be about $2 billion. According to the Calgary Herald, that's only the second operational deficit in the province since 1993-94.
The balance sheet is, however, is where the costs really add up. The government is borrowing over $12.7 billion for capital infrastructure projects over the next three years.
"We're going to have five million people in this province within 17 years. Where are their kids going to go to school? Where are they going to have hospitals to go to? How are they going to get to work if the road isn't there?," Finance Minister Doug Horner said, according to the Canadian Press, while justifying the new spending.
"We have to be able to build for the future — and that's what this (budget) is about."
Reaction has been almost unanimously negative with labour groups, think-tanks, and opposition parties railing against it.
Here is some of the reaction:
Derek Filderbrandt, Alberta director of the Canadian Taxpayers Federation, in the National Post:
"This is a complete repudiation of Ralph Klein’s legacy.
"The government seems to think being debt-free is a weird, quirky Albertan thing and that it’s somehow embarrassing to some of their friends … I think being debt-free is a point of pride for Alberta, and rightfully so. Do we really want to join the same fiscal class as Ontario? As Quebec? As the federal government?"
Gil McGowan, Alberta Federation of Labour president, quoted by the Calgary Herald
"By telling public sector workers that there is no money for wage increases this year and perhaps for the next four years, this government is almost guaranteeing an unnecessary showdown."
Danielle Smith, Leader of the Wildrose Party, quoted by the Calgary Herald
"Premier Redford said that this is a once in a generation budget and she’s absolutely right. It took a generation for Albertans to pay off Premier Don Getty’s debt and it will take a new generation to pay off the $17 billion dollars in new debt built up by Ms. Redford before 2016."
Brian Mason, Alberta NDP leader quoted by Digital Journal
"The problem with Redford’s line is that people do have memories. They’ll remember that she promised to balance the books both as a leadership candidate and a campaigning premier."
Interestingly, most of the budget detractors didn't offer any real solutions to unforeseen slumping resource revenues, a growing population and rising costs.
(Photo courtesy of the Canadian Press)
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