Lethbridge Herald- Surplus...really

Dave Mabell

LETHBRIDGE HERALD

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Suddenly, Alberta is reporting a budget surplus once again.

Instead of plunging into a $500-million deficit, Finance Minister Robin Campbell said Tuesday the province is on track to a $465-million surplus for the 2014-15 fiscal year. He credited higher revenue from corporate taxes, a better return on the province’s investments – and flood remediation money from Ottawa – for the unexpected surplus in the face of low crude oil prices.

“What the third-quarter results really show is how quickly and dramatically things can change,” Campbell said.

For southern Albertans, Lethbridge West MLA Greg Weadick said despite the positive results the Conservative government will still need to cut spending and raise more revenue. But already-promised projects like new schools and the major science structure at the University of Lethbridge are not in danger, he added.

For the region’s sole remaining Wildrose MLA, however, the financial report was another example of the long-ruling Conservatives “juggling the numbers.” Pat Stier, MLA for Livingstone-Macleod, said Campbell’s report is based on the same “fudge-it budget” system rejected last year by the province’s auditor general.

In Edmonton, Campbell warned that while the news is good right now, the forecast down the road is not – given that oil prices remain mired around the US$50-a-barrel range after spiking at US$108 last summer.

Those low oil prices will take a $7-billion bite out of next year’s budget, he predicted. Campbell has already said the province is looking to cut spending by five per cent across the board.

The government will be extending the timelines on some capital projects, the minister said, but it is not cancelling anything. Alberta is forecast to take on $12 billion in debt for capital projects.

Premier Jim Prentice – who predicted a third-quarter deficit of $500 million when he warned of budget cuts last month – has talked about raising Albertans’ personal income taxes. But he maintains his Conservative government will not touch corporate taxes or oil royalty rates.

“We have taken steps to protect our financial position that will help keep us in the black this year,” the premier said Tuesday.

Prentice has promised a longer-view budget next month, one that will decrease Alberta’s reliance on energy income by raising revenue from other sources.

Said Campbell, “What we will do is fix the fiscal foundation of the province so future generations don’t face the same issues they do today.”

For Weadick – recently acclaimed as the government party’s candidate in Lethbridge West once again – the financial update does not make the next fiscal year look much brighter. The new budget, to be tabled soon after the legislature resumes sitting on March 10, will still see budgets cut.

“We’re still projecting a significant deficit for the next (fiscal) year,” he said.

Because it’s less dependent on the energy sector, Weadick said southern Alberta remains a bright spot, thanks to food production and processing. Local employers are still telling him they can’t find people to work on their farms – or in the fast-food outlets in Lethbridge.

But with oil prices stalled around $50 or $55, Weadick says, the province must move to more reliable revenue sources.

Stier, responding to Campbell’s surprise announcement, said the Conservatives’ budget numbers can’t be trusted because they’re still using the reporting system introduced during former premier Alison Redford’s tenure. No other province frames its financial picture that way, he pointed out.

“But the government stillhas a spending problem,” regardless of how it’s reported.

“I don’t know how anyone can trust anything they say.”

The Conservative government is still taxing Albertans so it can assist the province’s large corporations, Stier said.

But at the same time, he said, the premier’s “doom and gloom” speeches are throwing a chill into the rest of the economy.

– with files from The Canadian Press

 

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