Premier Alison Redford took her warnings about dwindling resource revenues straight to Albertans Thursday night.
In an 8 minute televised State of the Province address, also aired on 660News, Redford explained why provincial government coffers are taking a financial hit never before seen in the oil-rich province.
Redford discussed what she termed the ‘bitumen bubble’ , the price differential Alberta oil sells for on world markets, currently $30 or $40 dollars less than West Texas Intermediate which closed the day at $95.95 US a barrel.
Redford, making such an address for the first time, said the bitumen bubble means the province is taking in $6 billion dollars less in royalty revenue, equivalent to all government spending on education.
Premier Redford said her government won’t just cut government spending across the board . She added it’s not enough to take the easy way out and raise taxes.
Redford offered no actual details about where spending cuts will be made but stated that some programs and services will change and Alberta finances need to be put on more stable footing, not as susceptible to swings in the price of oil and natural gas.
She plans to hold the first ever Alberta Economic Summit next month that will bring together leading thinkers, economists and everyday Albertans to continue the conversation.
The government’s plan also includes investing resource revenue into the Heritage Savings Trust Fund, something Redford says hasn’t been done in 25 years.
The provincial budget is due out March 7th.