EDMONTON – Premier Rachel Notley says 2018 will focus on Alberta’s fragile but rebounding economy, specifically a road map to get back to budget balance in five years.
“Presenting a responsible, credible path to balance for 2023 — we’re working very rigorously on it and it will be responsible,” Notley said in a year-end interview.
“We will not be making up numbers. We will not be pretending things. We’re going to be very, very up front and careful about how we do that, but I’m confident that we can.”
Notley’s government, entering the final full calendar year of its current mandate, has been both praised and pummelled for increasing capital spending and borrowing to pay for day-to-day operations as the best solution to navigate Alberta through a prolonged slump in oil prices.
This year’s deficit is pegged at $10.3 billion, with a long-term debt pegged to spike above $42 billion in the spring.
Notley said the specific plan to return to budget balance will be laid out in 2023, likely in the March budget.
“We have a sound financial footing in Alberta. We have the luxury of taking the time carefully to get ourselves back into a balanced fiscal situation,” she said.
“That’s why we’re going to roll out something that talks about how we’re going to get there in 2023.
“And yes we may have to tweak it along the way, but Albertans are going to be part of that conversation throughout.”
She said the province is making headway in diversifying the economy in a province projected to lead Canada in economic growth.
“We have to be much more restrained in our spending in Alberta,” she said, adding Alberta has let itself be hostage to wild swings in spending based on oil prices.
“It was the Wild West over the last 10 years. It was ridiculous. It actually created costs merely by way of uncertainty.
“We’re going to bring our rate of increase down in Alberta to a consistent amount that people expect.”
But she said there won’t be undue cuts in big-ticket departments such as health and education.
Under Notley’s watch, the province has seen multiple credit-rating downgrades. The main criticism has been not having a plan to get the books balanced.
The government has found savings by reducing some operational expenses and combining and amalgamating boards and agencies, but they are a relative drop in a bucket to the billions of dollars of red ink. Notley said her government will not sacrifice spending on front-line services.
Opposition parties say Notley is optimistic, but not realistic.
United Conservative leader Jason Kenney says Alberta spends 20 per cent per capita more than B.C. and that the deficit can be eradicated in six years with a spending freeze coupled with moderate economic growth.
Kenney has also promised to end the carbon tax on home heating and gasoline, calling it a burdensome and unnecessary drag on the economy.
The Alberta party says it, too, can end the deficit in that time, with a spending cap tied to renewable resources and constraining spending at one per cent a year.
Economists have recommended the government consider a sales tax as a long-term solution to create a constant, reliable source of revenue for a province that has cut and spent depending on the vagaries of oil and gas prices.
Notley said that is not the best plan for a province still trying to get back on its feet following years of steep job losses, particularly in Calgary and the oil patch.
“You don’t take that money out of the economy when you’re in the middle of a recession,” said Notley.
“That’s just not a thing.”