Robin Campbell hints at 9% cut, deficits in next budget
Finance minister says balanced budget would be 'irresponsible,' risks recession
Alberta’s finance minister warns that the province will have to cut its spending by around nine per cent and run deficits to deal with its budget woes.
“We are looking at a $7 billion hole this year. If we were to do nothing, we’d be looking at $7 billion next year,” Robin Campbell said Tuesday.
“So, three years of doing nothing would put us almost $20 billion in debt on the operating side, and we're not about to see that happen.”
Alberta is forecasting a significant shortfall following low oil prices. Reduced oil royalties have erased approximately 15 per cent of the province’s revenues, according to premier Jim Prentice.
Campbell also said the province will have to run “small deficits,” possibly for the next few years, to prevent more drastic cuts that he said “would be irresponsible for Albertans.”
“The advice that we’ve had from all the economists and all the banks … balancing the budget would tip Alberta into recession,” he said.
Instead, the government will need to rely on balancing spending cuts with finding new revenue and digging into Alberta’s contingency fund to weather the economic storm.
Premier Prentice said he is still consulting with the public over the next budget, and has heard that people want the province to maintain “core services" — things like healthcare and education.
“In broad terms, we know what needs to be done,” he said.
'The wrong way to go,' says critic
NDP Leader Rachel Notley fired back at the government following the news, calling the 9 per cent plan a “panicked, slash-and-burn approach."
"That’s just the wrong way to go. We need a measured approach,” she said.
Notley suggested that instead of spending cuts, the government needs to look at increasing corporate taxes to provide more stable revenue for Alberta.
“This government has squandered the unprecedented prosperity we’ve had over the last decade."
Campbell said he did not yet know when the next budget would be presented.