Premier Jason Kenney’s Conservative government tabled a budget that is even tougher to swallow than the one it campaigned on when it promised to institute a “spending freeze,” according to the Financial Post.
Alberta Finance Minister Travis Toews said his province has had “a spending problem,” and from the details of the proposed budget, it looks like the province is tightening its belt. A 7.7 percent cut in public service jobs means 2,100 employees will lose their positions over the next four years, while $1.3-billion in spending cuts is necessary in order to balance the books.
The budget also accounts for a reduction in corporate income taxes to 8 percent from 12 percent over the next four years. This is all part of the government’s plans to eliminate deficits within three years – something the voters overwhelmingly endorsed.
“It’s certainly an exciting day for myself and this ministry. I believe it’s a good day for Alberta,” the Finance Minister told reporters before tabling the $58.7-billion 2019-20 budget in the legislature.
Minister Toews: With Budget 2019, we have an obligation to live within our means. It’s unfair to saddle future generations with debt, to effectively steal their opportunities, and force them to pay our bills.#ableg #abbudget pic.twitter.com/mzAewYqzUa
— Alberta Government (@YourAlberta) October 24, 2019
The budget projects that by the end of 2020, there will be 824 fewer full-time government jobs and 764 fewer jobs at post-secondary institutions and government agencies, like the Alberta Energy Regulator. Most of these reductions will happen mainly by leaving empty jobs unfilled, but there could be some layoffs, reports the Edmonton Journal.
“It’s tough medicine, but it’s much-needed medicine,” said Richard Truscott, vice-president of the Canadian Federation of Independent Business in Alberta and B.C., on Thursday “It’s not going to be easy for Albertans to make some of these adjustments, but it’s absolutely necessary to get us back on a more fiscally sane path.”
Dependence on oil and gas revenues
Alberta is still forecasting a 30 percent jump in nonrenewable resource revenues that would move the province from an $8.7 billion deficit this year to a surplus in four years. This would include an extra $1.4 billion in revenues from the oilsands and an increase of $615 million in other resource revenues between now and 2022-2023.
This budget keeps the promises we made for Alberta people, job creators, and our economy.
We will control spending and get our finances back on track.
We will bring investment back to Alberta.
We will protect the services Albertans depend on. pic.twitter.com/H1rnCJgu0M
— Jason Kenney (@jkenney) October 25, 2019
Kenney is banking on reaching a balanced budget before he comes up for reelection in 2023. This will hinge on steadily increasing oil prices, growing bitumen royalties and the completion of three major pipeline expansions by 2024.
Should all the hype over the oilsands and pipelines not come to pass, the Finance Minister says he is ready to make more cuts. And this is going to be an interesting story to focus on, too. For Alberta, this is the toughest budget it has dealt with in the last 25 years.
The Globe and Mail writes that “Alberta has not reined in its spending in a quarter-century. Mr. Kenney’s proposed budget is almost unmatched in its ambition, promising to cut its operating spending annually for four years, resulting in a 2.8-percent cut over the coming years.”
For a good look at Alberta’s 2019 budget – go to Fiscal Plan – 2019 – 2023 Fiscal Plan.
