Finance Minister Joe Ceci said Alberta expects the deficit to grow to an all-time high of 5.9 billion Canadian dollars ($4.5 billion) in the fiscal year that began April 1. “This may not be the final number”. Neighboring Saskatchewan on Monday forecast its first deficit in two decades, citing lower oil prices and costly forest fires.
“We will be looking at both revenue levers and cutting levers or expenditure levers to get us into a balance by the year 2018-19”. “One we won’t consider, of course, is the provincial sales tax”.
On Friday, West Texas Intermediate crude closed just above $45. But since then prices have tanked, hovering around the $40 to $45 range. The 0.6 per cent contraction in GDP and an increasing unemployment rate, which was at 6.0 per cent in July, suggest Alberta is in a mild recession.
However, the increased tax revenue will not offset additional spending on health, education and disasters that is expected to push provincial spending above $50-billion for the first time.
Revenue is forecast at $44.3 billion – about $1 million higher than the Prentice budget.
Ceci said the NDP government will continue to look for efficiencies, but will not engage in large-scale layoffs or deep cuts to erase the red ink. “They threw away our opportunity to save and prepare for these challenges”. The money will also help agricultural producers across the province that have beemn hit by a record drought in some areas.
Ceci still plans on balancing the budget in three years.
Alberta Finance Minister Joe Ceci arrives for a cabinet meeting in Calgary, Alta., Thursday, May 28, 2015. “Instead we got a brochure”, he said.
Interim Liberal leader David Swann called on the government to stimulate the economy by investing in infrastructure, phasing out the small business tax and protecting programs that encourage economic diversification.
Opposition parties in the province have criticized the NDP-led government for failing to rein in spending and considering increases in the province’s minimum wage and royalty rates on oil and gas production.