Dropping oil prices has compelled the Alberta government to limit new hires, curb spending and cut travel.
With West Texas Intermediate Oil closing at $55 a barrel, Premier Jim Prentice said he can’t wait for next year’s budget to start making cuts to government spending.
“The challenges that are before us cannot wait until the spring,” Prentice said during a news conference with Finance Minister Robin Campbell on Monday.
“Albertans expect us to be disciplined, especially now."
New staff will be hired only to fill front-line positions or jobs that are deemed critical to government operations.
The government will only spend on goods, services, travel training or grants that are necessary “to meet critical operational requirements or legal commitments.”
"This is a no-frills approach and we are focusing on needs, not on wants," Prentice said.
Prentice also announced he will chair a new committee comprised of seven cabinet ministers that will work throughout the holidays on next year’s budget. The committee is expected to complete its work by mid to late January.
Alberta gets about a quarter of its revenue from oil and gas royalties. The impact of dropping oil prices is approximately $7 billion dollars, Prentice said.
NDP MLA Brian Mason criticized the government for failing to diversify revenue sources and cutting whenever the price of oil drops.
“It's over and over again," he said. "Every 5 to 10 years we go through this and it is so unnecessary – and I don't think that Albertans should tolerate it.”
Mason said Prentice is making these announcements to prepare the public for deep cuts in next year's budget. He said they come at a time when Alberta needs to hire more front-line workers to build new schools and replace aging hospitals in order to keep up with population growth.