Calgary

Albertans grill Finance Minister Joe Ceci on 2015 budget

Finance Minister Joe Ceci says deficits, at this point, are better than deep cuts to health care and education. He spoke with the Calgary Eyeopener this morning and later took questions from listeners on alberta@noon.

Joe Ceci spoke with the Calgary Eyeopener this morning and returned to take calls on alberta@noon

Alberta Finance Minister Joe Ceci tabled the 2015 provincial budget on Tuesday. (CBC)

Finance Minister Joe Ceci says deficits, at this point, are better than deep cuts to health care and education. 

Finance Minister Joe Ceci takes questions from callers on CBC Radio's alberta@noon.

"We could have laid off teachers and nurses to get us to a balanced budget," he said. "Some would do that. I know the opposition is calling for that.

"But we wanted to provide predictable, stable funding for those things like healthcare, education and human services."

The morning after introducing his government's first financial plan, Ceci explained his choices on the Calgary Eyeopener, defending the decision to run a $6.1-billion consolidated deficit — the largest in Alberta's history.

Ceci said the NDP had little other option, given the crash in the price of oil.

The Alberta government is expected to take in just $2.8 billion in non-renewable resource revenue for 2015-16, down from roughly $8.9 billion the year before and a peak of $11.6 billion in 2011-12.

New taxes

Ceci said his government's elimination of Alberta's unusual flat-tax structure on income and its increase to the province's corporate tax rate will help offset part of that massive decline in resource revenue, but only a small part.

Adding a progressively increasing tax rate for earnings above $125,000 is expected to bring in an additional $450 million to government coffers in 2015-16 and another $906 million more in 2016-17.

Hiking the corporate tax rate by two percentage points, meanwhile, is projected to generate an additional $250 million this fiscal year and $450 million in the next.

But Ceci said he opted not to also add a sales tax because the NDP hadn't campaigned on that in the spring election.

"We feel it's important to stay true to the promises we made, and we're following through with our commitments," he said.

Oil rebound assumed

Like the previous PC government's budget that never passed in the spring, the new NDP budget relies on the long-term assumption that oil prices will increase in the coming years.

The financial plan estimates West Texas Intermediate prices will reach $61 per barrel in 2015-16 and $68 per barrel in 2016-17.

As of this morning, the price was at $45 per barrel. Ceci said he firmly believes oil prices will rise as time goes on. 

"I think this is a safe bet," he said.

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