You would be hard pressed to open a newspaper or turn on the TV or radio these days and not find the subject of Alberta’s finances being covered. The fact is we are talking about this around our own dinner tables and around the office water coolers. This should be no surprise given the reality we are facing. This is a challenging time. Oil prices have plummeted, and that’s putting a big hole in our province’s finances. If this continues, we are looking at a 6 or 7 billion dollar shortfall. Think of it. That’s the equivalent of the entire annual education budget!
Any economist will tell you that if you were to cut that amount of money from the Provincial budget, you would most certainly trip the Province into recession. The reality is that we have 15,000 children moving here every year, and that equates to 28 schools. There is no question that our kids need schools, and I’ll be the first to advocate for those. Giant hatchets are seldom helpful.
So, what should the Government do?
It’s clear that a balanced approach is what is needed. First and foremost, I fully expect the Premier and Finance Minister Campbell to reduce Government spending, which they have already promised to do. Alberta has the most well funded public services, along with the lowest taxes, and we have been filling that gap with resource revenues. This is unsustainable. Premier Prentice knows this and is committed to getting us off the roller coaster ride of being dependent on royalty revenue.
I have always said and will always believe that good Government means looking to the mirror first. What I mean by that is this: When we face financial challenges at home, we have to make tough choices. When we have difficult financial times with our businesses, it’s on us to address them. The same goes for Government.
It is also pretty clear that Alberta has to find a way to increase revenue. There has been a lot of talk in the media about a Provincial sales tax. I can tell you that I don’t support one and I never have. This is not what Albertans want or expect. I am getting a lot of calls and emails with other suggestions. People are suggesting everything from health care premiums, to flat tax increases, to sliding gas tax hikes. Our Government is considering all of the options carefully and cautiously. Again, I am convinced that the Premier and his team will do what is best for Alberta, and we will most certainly remain the best tax jurisdiction in the country. This is a big part of what makes our province the best place to raise a family, and our Government knows this.
Another option which will most certainly come into play is drawing money from the contingency fund. In our homes, we save money for retirement and for rainy days. Well, it’s raining. It seems reasonable to access some money from that fund to help us through this challenging time.
The Provincial budget is expected in March, and there are some tough decisions to be made going forward. Whatever they are, I know this:
Albertans are resilient. We have been through tough times before and have always been equal to the task. This time is no different. With prudence and vision we will protect the province’s economic health while delivering on Albertans’ priorities. We will emerge from this even stronger than we are today. It’s the Alberta way.