Alberta gets $250M in federal cash to help ailing economy
Money helps provinces facing significant year-over-year declines in revenues in extraordinary downturns
The federal government will provide Alberta with $250 million to help offset the financial impact of low oil prices on the treasury.
"I saw firsthand the challenges facing Albertan families on my recent visit to Calgary, and I am pleased to have worked closely with Minister (Joe) Ceci to provide much-needed relief," federal Finance Minister Bill Morneau said in a news release.
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The money is an advance under the Fiscal Stabilization Program, which helps provinces facing "significant year-over-year declines in their revenues resulting from extraordinary economic downturns," the release said.
The province applied for the sum earlier this month. It was determined that Alberta qualified for the maximum amount of $60 per person, for a total of $251.4 million.
"This is one of the issues that I raised with Prime Minister Trudeau during his visit to Alberta," said Premier Rachel Notley Tuesday.
"We still have other matters to address," she said. "But we are off to a good start."
University of Calgary economics professor Trevor Tombe said the province could access another $550 million from the fund as a interest-free loan, if it wishes.
But Tombe calls either sum more symbolic than a meaningful financial contribution to the province's revenue stream.
"We're talking a budget here in the province that is 20 times larger than that transfer," he said. "The deficit we're likely to see in the budget in a month or two is probably going to be in the range of $6 billion to $8 billion."
The province is also waiting for nearly $700 million in infrastructure money from the Building Canada Fund.
Notley and Trudeau also discussed changes to the employment insurance program to help out-of-work Albertans access help sooner.
While any money is welcomed, Albertans should not be relying on the federal government for handouts, Tombe said.
"Alberta still has a very strong ability to raise revenue if we choose to do so," he said. "Our deficit is a policy choice."
The province could raise billions of dollars simply by adopting tax policies similar to other provinces, he said.