Edmonton - Alberta 3
rd Quarter Fiscal Update and economic outlook presented by Finance Minister Joe Ceci earlier today maintains an optimism that is simply out of sync with Alberta’s fiscal and economic realities. The proposed path to balance pitched by the minister sidesteps the priorities for a healthy economy and sustainable fiscal position, and what the Alberta Chambers of Commerce network has been calling for with their Vote Prosperity campaign for the upcoming provincial election.
The important facts Albertans should know from the fiscal update reported today:
- Corporate tax revenues down, meaning employers are struggling to create jobs
- Operational spending continues to outstrip revenue, meaning we spend more than we earn
- Total debt continues to rise, meaning less opportunities for future Albertans
- Costs of debt servicing continue to rise, meaning less services for Albertans today
The Conference Board of Canada in their 2019 Winter Provincial Outlook predicts Alberta’s growth will weaken and the economy will be hurt by the cuts in oil production and the declines in energy investment. StatsCan’s most recent monthly Labour Force Survey shows employment growth in Alberta has declined for the second month in a row and is down 16,000 jobs in January, while unemployment was up by 9,500 Alberta and the unemployment rate increased 0.4 percentage points to 6.8%.
“We’ve been very clear about the need to improve government accountability and strengthen business competitiveness if sustainable shared prosperity is the goal, as it should be for the province,” says Ken Kobly, President & CEO of the Alberta Chambers of Commerce. “We all have to wonder how credible any proposition of a path back to balance really is. With each update the numbers of these indicators all keep running the wrong way.”
With the update the Province also predicts a 124% increase in non-renewable resource revenues by 2023-24, doubling from the current $5.5 billion annually to more than $12 billion. The Alberta Chambers of Commerce simply doesn’t agree with banking on royalty revenues from the Trans Mountain Pipeline expansion project (TMX). After being delayed last summer, last week the federal government delayed moving the project ahead for at least another 90 days in excess of their original deadline.
Alternative options have been available to accelerate the TMX construction, yet remain idle in the toolboxes of both the federal and Alberta government. The Alberta Chambers of Commerce has been calling on the Alberta government to grow provincial trade and access to diverse overseas markets for energy products, and to consider all measures to hold provinces and the Government of Canada to their commitments under the Canadian Free Trade and New West Partnership Trade Agreements.
“The Prime Minister could have got construction started during any sitting of Parliament. The Alberta government could have lit a fire under the backsides of BC Premier John Horgan and the Prime Minister’s by proclaiming Bill 12,” says Kobly. “Instead, Alberta’s Premier is appearing in Senate hearings tomorrow to plead the nation’s case about the disastrous consequences to the resource sector of implementing Bill C-69 when planned investment in major projects has already nose-dived $100 billion the last two years alone.”
“The C.D. Howe Institute called the tumbling investment in the resource sector a crisis of our making, and no wonder when the equivalent of a 4.5% drop in national GDP doesn’t spur federal action,” says Kobly. “Alberta’s total debt now stands at $58.6 billion. It’s a fiscal evisceration and self-inflicted crisis. We keep borrowing and doubling down on a pipeline mirage the Prime Minster keeps dangling beyond reach with promises and delays.”
Business has to hold the line when revenues are down. It is in the long-term public interest for government to do the same. Today’s fiscal update shows the operational spending to continue growing at the rate of operational spending plus population, an indication there is no effort being made to address the province’s growing debt.
“With our Vote Prosperity campaign, the Alberta Chamber network is encouraging voters to learn about the real priorities for growing our economy and sustaining services for Albertans in the long term,” says Kobly. “Get involved, and hold all candidates and party’s toes to the fire about their commitments to a strong Alberta and healthy business community. The only solace of today’s update is that the deficit isn’t as bad as the earlier forecasts.”
“If Albertans are buying the path to balance pitch, I’d tell them to bring their rain gear and compass because we seem to be using the wrong map. There's a long road to recovery ahead, and the current path isn’t going to get us there.”
