Alberta’s deficit remains unchanged despite higher than expected revenues

Despite $1 billion in higher than expected revenues, Alberta’s deficit remained at $10.8 billion for the 2016-17 fiscal year and Finance Minister Joe Ceci said that will be the priority instead of provincial debt.

“We want to get to balance,” Joe Ceci said Thursday in his 2016-2017 fiscal update, which showed Alberta’s economy contracted by 3.5 per cent in last year.

However, the NDP’s anticipated wait for a balanced budget is still six years Ceci said, as reporters pressed for more specific strategies on the economic recovery.

“The plan is to have smaller and smaller deficits year on year on year going out and balance in 2023,” he said. “The plan is built on supporting Albertans through this recovery into growth.”

Ceci said while the government did see increases in investment income and resource revenues, personal and corporate income taxes did not perform as well, thus the deficit not be decreased despite the $1 billion revenue, along with other expenses like the Fort McMurray wildfire.

Moving forward, Ceci said expense growth would be three per cent, under population plus inflation, combined with revenue resources.

But Ceci was also asked if the NDP is being too reliant on the price of oil, one of the major criticisms on previous PC governments.

“We have risk-adjusted it, because we know that it goes up and down a lot and you can see this year, it changed drastically in Budget 2016, so I don’t think we’re over-relying,” he said.

One of the NDP’s most touted employment strategies was infrastructure spending; however in 2016, the government spent about $6.5 billion, almost $2 billion less than originally expected.

University of Calgary Economist and Research Fellow at the School of Public Policy Trevor Tombe said the infrastructure spending gap also stood out to him.

“This is significant,” he said. “The planned boost in capital spending just never materialized. They were planning for $8.5 and they came in at $6.5.”

Ceci said all infrastructure spending will get spent.

“The difficulties getting some of that money invested this year had to do with partners who have some responsibilities getting their projects up and running too and approvals for,” he said, reiterating the wildfire also moved attention away from capital investment.

Speaking positively about the future, Ceci said Alberta will return to its September 2015 peak of employment in 2018, referenced economic forecasts that have Alberta leading the country, while adding manufacturing and rig activity is up.

“The journey to recovery and a new foundation for prosperity continues,” he said.

Alberta’s opposition parties were quick to respond to the update, with Wildrose Leader Brian Jean calling it without question the worst year on the books in Alberta’s history.

“The NDP government is working twice as hard this year to try and outdo themselves,” Jean said in a statement. “Their tax hikes were reckless, their legislation scared billions of investment away, and their dangerous levels of spending and billions wasted on failed energy experiments will be a stain on this NDP government Albertans won’t soon forget.”

The Wildrose released pre-budget recommendations earlier this year, a three-part vision back to balance.

However, Tombe said lacks of detailed plans or shadow budgets would be much stronger.

“Given the scale of the challenge in front of us, Albertans would be better served from having lots of ideas on the table that we could actually debate and discuss,” he said.

Tombe mentions the need for more details while pointing out Ceci’s denial of depending on oil prices, saying deficit won’t go below $10 billion in any of the next three years if oil prices evolve as future markets predict they will.

“I think the opposition has dropped the ball here as well.”

Alberta Party Leader Greg Clark – who has provided a shadow budget – said on Twitter there would be a day of reckoning and that NDP mismanagement is hurting Alberta.

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