These types of promises are not meant to be broken.
Only a few months after election promises of a bright future of stable funding and balanced budgets, the provincial government is asking Albertans to brace themselves for spending cuts and possibly massive deficits.
Alberta Finance Minister Doug Horner spoke to his provincial counterparts at a meeting in Quebec earlier this month and announced Alberta is facing a $3 billion deficit.
This is a significant change in tone from last February when Premier Alison Redford’s government predicted a $952,000 surplus in 2013 and a $5.2 billion surplus in 2014.
Horner is blaming the massive shift in budget projections on substantially lower than expected resource revenue.
Few can accurately predict
revenue from a volatile commodity and one can expect some fluctuations, but missing a budget projection by as much as $4 billion is disappointing and many Albertans will find Horner’s announcement difficult to swallow.
Regardless, what is done is done and now Redford’s government must take a long hard look at its spending habits.
The Province has $5 billion in its Sustainability Fund, which can be compared to a savings account. Taxpayers should not be too concerned if the government has to dip into the Sustainability Fund to balance its budget on occasion to avoid cutting programs or raising taxes. After all, that is what a savings account is for.
Certainly, Alberta is feeling the effects of one of the worst global recessions in decades and one could argue the province is emerging relatively unscathed due to good government and sound policies such as establishing a Sustainability Fund for rainy days.
However, the Sustainability Fund and Heritage Trust Fund must not be used annually as a way to cover the deficit in government spending.
It does not look as though resource revenue is going to rebound early in 2013 and lower than expected revenues could continue into 2014.
Therefore, Mr. Horner needs to review how he is allocating dollars. Are Albertans getting the best bang for their buck?
During the election Redford touted a new budgeting process, called zero-based budgeting, where spending in every portfolio and program must be justified or it will be cut.
The premier must now use one election promise to ensure she can keep another — a balanced budget.
