EDMONTON – Alberta Finance Minister Joe Ceci says Thursday’s budget will not only contain a huge deficit, but also a plan on how to dig out of it.
“A $10.4-billion deficit is serious, but it is manageable,” Ceci said Wednesday.
“And we will show when we release our fiscal plan tomorrow that we are reducing the deficit year over year over year. With a growing economy and (by) reducing deficit, we will find ourselves back in balance.”
Ceci commented after posing for photographers with new workboots, as per a parliamentary tradition that a finance minister gets a new pair of shoes before budget day.
Premier Rachel Notley’s government has already announced or signalled core elements of the 2016-17 budget, including the $10.4 billion in red ink.
Ceci attributed the heavy deficit to a steep and precipitous drop in oil revenue over the last two years.
West Texas Intermediate, the benchmark price for oil, fell below US$30 a barrel in January, but has recovered slightly and hovers in the low $40s. It was more than US $100 a barrel in the summer of 2014.
The low prices have dampened the bottom lines of energy producing provinces across the country.
The government of Newfoundland and Labrador, another province heavily reliant on energy income, is also to table a budget Thursday. Tax hikes, job losses and spending cuts are among grim expectations as the oil price slide takes its toll there as well.
Notley’s provincewide TV address last week revealed this year’s resource revenue will total $1.4 billion compared with almost $9 billion in the 2014-15 budget year.
Ceci and Notley have said that some new programs will be delayed or spread over a longer time, but that front-line jobs will not be cut. An accelerated $34-billion infrastructure program is to continue.
The government also plans to spend an additional $500 million or more in seniors housing.
“It’s not an austerity budget,” said Ceci.
The oil plunge has resulted in tens of thousands of job losses. Ceci said the budget will have more details on a plan to diversify the economy and create employment.
“You’ll be getting some depth and detail about different aspects (on a) suite of programs that will help Albertans get back to work.”
The NDP’s budget last fall freed up $2 billion for investments and loans to aid small and medium-sized businesses and Alberta growth companies.
But a signature job creation program, promised in last year’s election campaign, has been scrapped. The plan was to create 27,000 new jobs a year through 2017 by paying a portion of the salary for new hires by eligible employers.
Economic Development Minister Deron Bilous said Monday the government had received enough evidence to be persuaded that the program would not be effective.
The budget is also to include details of a new carbon tax set to begin Jan. 1. It’s part of Alberta’s climate-change plan and is to provide incentives to go greener by increasing the cost of everything from gas at the pumps to home heating and electricity.
The tax is expected to bring in $3 billion a year, but the government plans to give rebates to low and middle-income Albertans.
Opposition Wildrose Leader Brian Jean said the government needs to rethink the tax given the sluggish economy.
“I would cancel it immediately,” he said.
Progressive Conservative interim leader Ric McIver said he wants to see a plan to pay back provincial debt that is projected to reach almost $50 billion by the end of the decade.
“That’s what Albertans deserve,” he said.