Redford said she wants to speak directly to Albertans about the effects of rapidly declining revenues on Alberta’s economic plan.
The eight-minute address, which will be broadcast on CTV at the end of the 6 p.m. news hour, will cost taxpayers about $55,000.
In a message emailed to Progressive Conservative party members Wednesday, Redford committed to delivering on the province’s priorities, despite the lower-than-expected price Alberta is getting for its crude oil and bitumen.
“In this year’s budget, we’ll hold the line on our spending and we’ll live within our means,” she said.
“Our party was elected to keep building Alberta — to focus our spending on the priorities that you told me were important, and that is exactly what we’ll do,” Redford said.
Opposition leaders slammed the premier for using an infomercial to outline the government’s economic situation, rather than the traditional Throne speech.
“The question you have to ask is, ‘Why is she doing this?’” said Wildrose Leader Danielle Smith. “It’s pretty clear they are in deep trouble.”
Smith said she fears the government’s failure to act immediately when oil revenues dropped last year will result in it slashing services.
NDP Leader Brian Mason and Liberal Leader Raj Sherman accused the premier of trying to circumvent the legislature by trying to “spin” the public on television.
“No amount of spin will take away from the fact that her projections for the fudge-it budget were completely off (and) her spending commitments and election promises were irresponsible,” Sherman said.
Mason said Redford is preparing Albertans for the fact she can’t keep the $6-billion worth of commitments made during the spring election.
“She promised Albertans in the election that there will be no service cuts and she promised there will be no tax increases. She is very likely to break both of those promises in this budget.”
Thursday’s televised address comes as the government faces a growing deficit and increasing calls to rethink its financial policies, with some calls to sharply chop spending and others discussing the introduction of a consumption tax.
On Monday, Finance Minister Doug Horner told the Calgary Chamber of Commerce the province is now focused on finding savings in its $40-billion annual spending, as opposed to new tax measures. He noted legislation would require a referendum to introduce a sales tax and there are no plans to hold such a vote.
However, Horner said there is an increasing willingness among the public to discuss restructuring the government’s finances to lessen its dependence on non-renewable resource revenue.
In its current budget, the province projected it would raise $11.2 billion in energy royalties, making up 28 per cent of all government revenue. But the province’s red ink is growing, with another deficit — potentially the sixth in a row — expected when the 2013 budget is released March 7.
Former federal cabinet minister David Emerson, who chaired a 2011 study by the Premier’s Council for Economic Strategy that called on Alberta to wean itself off spending non-renewable resource revenues, said no one should be surprised of the problems battering the province’s treasury.
He said Redford needs to explain the nature of the problem to Albertans, come up with a plan on how to match operating expenses with stable government revenues, and “don’t try to fix it overnight.”
“This has been brewing for a long time,” Emerson said in an interview. “The No. 1 issue is we have to stop looking at natural resources as the way we’re going to pay for our groceries and recognize we do have a fiscal problem.”
The province has already taken steps to curb spending.
Education Minister Jeff Johnson, for example, told school councils on Tuesday evening that the premier’s previous promise of funding full-day kindergarten will not happen in the upcoming budget. As well, Johnson suggested the province may have to extend the four-year timeline for building 50 new schools and modernizing 70 more.
A report released Wednesday by the Conference Board of Canada noted the province is headed toward another big deficit this year, despite projected economic growth in Alberta of three per cent and an unemployment rate dropping to 4.8 per cent.
“Not having a provincial consumption or sales tax is highly popular and has been great politics, but it denies the provincial government a steady and stable source of revenue through the business cycle,” the report said. “It also feeds the illusion of Albertans being richer than they really are.”
Pedro Antunes, the board’s director of national and provincial economic forecasts, estimated a new provincial sales tax would raise about $800 million in Alberta for each percentage point imposed at the cash register.
“Alberta has no sales tax and there’s room to manoeuvre there without hopefully having too much impact on the consumer.”
But the political dynamics of raising taxes in Alberta — something Redford has vowed not to do — are fraught with danger for the government.
Pollster Marc Henry with ThinkHQ Public Affairs surveyed 1,310 Albertans last month and found little appetite for tax hikes.
When asked what course of budget action they’d prefer, 42 per cent of Albertans said they’d prefer to cut spending and government services, while 16 per cent said they’d opt to raise taxes.
Another 16 per cent want to use the remaining money in the government’s Sustainability Fund, while eight per cent would choose to go into debt. The online survey has a margin of error of plus or minus 2.7 percentage points.
To institute a sales taxes, the government would have to convince people that Alberta has a revenue issue, not a spending problem — something it hasn’t done yet, Henry said.
“Most Albertans would look at a sales tax as a last resort — and I don’t think they’ve made that argument convincingly,” he said, calling a sales tax political “poison.”
Political scientist Roger Gibbins, a senior fellow with the Canada West Foundation, believes the argument could be made for a sales tax, noting Albertans have paid the federal GST for two decades. A broader question is whether the current problems facing bitumen and natural gas prices can be solved quickly.
“We may be in the soup on this for some time,” Gibbins said. “If this is kind of a new normal, it doesn’t look to me to be a sustainable normal.”
Original Article
Source: calgary herald
Author: Darcy Henton and Chris Varcoe
No comments:
Post a Comment