Premier Alison Redford confirmed Alberta is facing a $6-billion shortfall in resource revenues this year, during an eight-minute televised address, Jan. 24.
“This bitumen bubble means the Alberta government will collect about $6 billion less in revenue this year alone,” she said during the address, taped in her Calgary home. “To put that into context, that’s the equivalent to all our government’s spending on education each year. So as we prepare for this year’s budget, it means we have to make some very difficult choices.”
The shortfall is due to the price differential between West Texas Intermediate oil and Alberta’s oilsands bitumen, according to Redford who warned Albertans can expect to see some changes in service levels.
Without revealing specifics on how the government would make the necessary adjustments to the upcoming budget, to be tabled March 7, Redford promised the government will be “thoughtful in our approach.”
During the address, Redford hinted at not raising taxes while continuing to support families and communities.
“It’s not good enough to simply take an axe to government spending across the board,” she said. “That would mean vulnerable Albertans get hit the hardest. And it is not good enough to take the easy way out and raise taxes.”
Redford warned with 95,000 people moving to the province every year, it would not be easy to hold the line on spending.
“So while it may sound relatively painless to hold overall spending levels, its not,” she said.
Redford went on to say it is critical that Alberta resources get to new markets, but it won’t happen overnight.
“I will continue to fight for a Canadian energy strategy,” she said. “We have a duty to ensure our resources get to new markets at much fairer prices.”
The premier also said the budget will include an investment of money in the Alberta Heritage Trust Savings Fund for the first time in 25 years.
Redford announced she will hold a one-day economic summit in February, bringing together experts, academics, government and residents, to talk about diversifying the Alberta economy.
Airdrie MLA Rob Anderson called the address, which reportedly cost $55,000 to produce, a waste of taxpayer’s money.
“There is more substance in virtually every Seinfeld episode that I have watched than in Premier Redford’s address,” he said. “She used $55,000 of Alberta taxpayer’s money to tell us why we are broke. She didn’t come up with any plans or specifics, it was all just platitudes and (saying) we are going to spend wisely.”
Anderson said the price differential on Alberta’s oil has remained relatively steady since before the election, at between $20 and $30 per barrel, questioning Redford’s remarks about the unexpected drop.
Alderman Allan Hunter, who is a member of the Airdrie Regional Health Care Foundation, a health-care advocacy group made up of a number of residents and local politicians, said Redford’s televised address did little to quell fears that Airdrie’s urgent care centre’s front-line workers may come under fire.
Hunter said the speech was “embarrassing.”
“We are the richest jurisdiction in North America,” he said. “We have the money, it is just not going to the right places.”
Hunter said cutting front-line health-care workers, such as Airdrie’s nurse practitioners, whom Alberta Health Services (AHS) announced they were laying off earlier this month before rescinding the decision due to public pressure, is not fiscally efficient.
“Cutting front-line people is not going to fix anyone’s budget,” said Hunter. “It actually compounds the problems. I am looking for courage from our government to do the right thing.”
Hunter said AHS should cut from its own administration rather than from front-line staff.
“Leadership means sometimes going out there and doing something (difficult),” he said.
