Travis Toews (Alberta Minister of Finance and President of the Treasury Board) meets with news media at the Alberta Legislature in Edmonton on the eve of the provincial budget that he will release on Thursday February 27, 2020.
The UCP government’s second budget will stay the course in trying to attract investment and private sector jobs, says Finance Minister Travis Toews.
“There continues to be heavy lifting in front of us as a province, but I will say this: we are on track,” said Toews Wednesday, a day before tabling the provincial budget.
Wearing the same cowboy boots he donned for the previous budget four months ago, Toews said they were meant to represent entrepreneurial, hardworking Albertans.
While Alberta’s economy is growing, the province’s real GDP is not forecasted to grow as much as the government predicted it would. The average forecasted growth in GDP from CIBC, TD Bank, Royal Bank, Scotia Bank, National and BMO is almost a full percentage point behind the government’s 2020 projection in October.
“What we see today out there in the global economy represents the volatility risk that we have in Alberta, and it just further reinforces the rationale to manage and control what we can control,” said Toews.
Last October, the UCP government introduced an annual one per cent decrease to the corporate income tax rate, lowering it to eight per cent from 12 per cent by 2022.
The rate cut was meant to attract investment in jobs and is expected to give up $2.4 billion in net revenue over four years by 2022-23.
In January, Alberta’s unemployment rate was at 7.3 per cent, and Edmonton’s unemployment was the second highest rate in Canada, according to Statistics Canada.
In its 2019-20 budget, the government planned to run deficits until 2022-23, when it hopes to post a $600-million surplus. As a result, some departments’ budgets were frozen or cut, and the government said it planned to reduce the size of the public service by 7.8 per cent over three years.
Those losses will continue, mostly through attrition, in 2020, Toews said.
“We’re continuing on that plan.”
Also since October, the price of western Canadian oil has dropped — even though government spending estimates rely on the price of West Texas Intermediate to climb to US$63 per barrel by 2023.
The government will continue to fund the much-criticized $30-million Canadian Energy Centre to defend the Alberta energy industry. The so-called war room will be valuable “in the long term,” said Toews.
Opposition NDP finance critic Shannon Phillips said she expects to see significant cuts to health care to make up for decreases in government revenue. She said she’s also worried about cuts to economic diversification programs and costs being downloaded onto municipalities and ultimately taxpayers.
“While rich get richer, everyday people, working-class people are left behind. And I am deeply concerned … (about) what we will see in tomorrow’s budget,” said Phillips.
The government has said health and education funding will be maintained or increased, but the results of a sweeping health services review have yet to be implemented, and some school boards have already been forced to make cuts and spend their savings as enrolment increases.
The Alberta government has terminated its funding contract with doctors in what it called a necessary move to control ballooning health-care costs in the province.
Toews’s comments echo Tuesday’s throne speech, which said getting Alberta back to work is the government’s central priority.
“They said some words about jobs, but they didn’t say how they were going to do it,” said Phillips.
