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.
Olds-Didsbury-Three Hills MLA Bruce Rowe called the address “a whole lot of nothing,” adding it would have been better for Albertans to know what to expect when the budget is announced on March 8.
“I think they are in a real quandary right now,” said Rowe, adding Redford’s address didn’t give any practical solutions for the revenue resource problem.
“To claim now they didn’t see this coming when everyone was advising them it was coming (is ridiculous),” said Rowe.
Airdrie MLA Rob Anderson called the address, which reportedly cost $55,000 to produce, a waste of taxpayer’s money.
“She used $55,000 of Alberta taxpayer’s money to tell us why we are broke,” he said. “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.
Chestermere-Rocky View MLA Bruce McAllister agreed saying the differential has hardly changed since Redford’s government was elected last spring.
“It’s so disingenuous it’s insulting,” said McAllister. “The government seems to be looking for a scapegoat… for its financial mismanagement.”
