Alberta Liberal Leader David Khan and MLA David Swann declare the Q2 Fiscal Update has Alberta on the edge of a financial cliff that should concern all Albertans.
Khan stated, “We are facing a precarious future. Spending is continuing to increase and GDP growth is shrinking. Both investment income and corporate income tax income are lower. Non-renewable resource revenue and revenue from personal income tax are both up, for now. The deficit is lower, but it’s still a whopping $7.5 billion.”
Swann stated, “The government continues to draw money from the Heritage Trust Fund to artificially reduce the deficit. They have pulled out over $4.4 billion in the past 3 years. That is like pulling money out of your RRSP to pay down your credit cards. It makes no sense. It is robbing future generations of Albertans just to deal with a current financial problem.”
Khan added, “Oil continues its roller-coaster run, taking Albertans on a yet another stomach-churning ride. The Western Canada Select (WCS) oil price differential will be the key. The Government is projecting the WCS differential average for the year at just below $30/barrel. That is marginally better than the almost $50 spread that has been punishing all Albertans for the past month. But it could get worse in the months to come.
“The NDP Government claims our economy is roaring back. At best it’s limping along. The most recent unemployment rate is well above 8% in Calgary. That city’s downtown office vacancy rate is still staggering, at upwards of 30%.
“This NDP Government is continuing to make expensive, speculative promises or proposals in the lead up to the election.
“This includes throwing up to $3 billion at rail cars. This proposal wouldn’t kick in for another 13 months, and may increase WCS prices a paltry $4/barrel. This is a costly scheme designed to win votes in the next election. But it delivers nothing now to Albertans.
“The other alleged solution is oil production reductions. This could reduce royalty revenues and leave less money for social programs. It could also lead to more job losses. Some oil companies are strongly opposed. This is yet another “Hail Mary” plan.”
The Alberta Liberals are extremely concerned that things are going to get worse before they get better. Oil service companies have announced more layoffs just this week. Major oil companies are declaring we are in a financial crisis. The construction of more pipeline capacity would provide considerable relief. We support the Trans Mountain Pipeline expansion project. But we also know the consultation and approval process must be properly completed and past mistakes avoided.
Albertans are facing a grim Christmas. We are all in a heap of hurt. We can’t keep running up our credit card. We must address revenue sources, spending priorities, and structural deficits.
Alberta Liberals know the people of this province are hard working and resilient. We will get through this together.