Sunday, March 19, 2017

Alberta will continue to swim in red ink despite “green shoots” in the economy as the NDP government’s provincial budget released Thursday forecasts a $10.3-billion deficit for 2017-18 and the provincial debt rising to $45 billion by the end of the year.----------“There are choices to be made,” Ceci told reporters at the provincial legislature. “The choices we have made as a government is to continue to support Albertans with the necessary programs and services they require. I appreciate that other parties may feel differently about that, but that would make life more difficult and leave Albertans on their own.”-------------------

Puzzling decision of the GOA to go into deficit mode while we are still in a recession. Why do the NDP folks believe in the gold pot at the end of the rainstorm's rainbow?
It's not good fiscal management to add to debt without more money coming in; the debt servicing charges are an additional burden. The money we waste on servicing debt would be better used on senior care and continuing care facilities in the public sector.
A decision making tree is required to explain all these odd decisions especially a hospital in SW Edmonton when we need 2,000 long term care beds.
What the heck?
Alberta will continue to swim in red ink despite “green shoots” in the economy as the NDP government’s provincial budget released Thursday forecasts a $10.3-billion deficit for 2017-18 and the provincial debt rising to $45 billion by the end of the year.
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Alberta NDP posts $10.3 billion shortfall in provincial budget

Alberta Finance Minister Joe Ceci and Premier Rachel Notley during the tabling of the provincial budget at the Alberta Legislature in Edmonton on March 16, 2017.IAN KUCERAK / CALGARY HERALD
Alberta 2017 budget deficit 2col
Alberta 2017 budget deficit 2col / CALGARY HERALD
Alberta 2017 budget taxes 2col
Alberta 2017 budget taxes 2col / CALGARY HERALD
Pumpjacks pump crude oil near Halkirk, Alberta. / CALGARY HERALD
EDMONTON — Alberta will continue to swim in red ink despite “green shoots” in the economy as the NDP government’s provincial budget released Thursday forecasts a $10.3-billion deficit for 2017-18 and the provincial debt rising to $45 billion by the end of the year.
The government has kept dollars flowing — and borrowed heavily for both capital and operating costs — during the past two years of recession as an economic booster in a time of low oil prices.
While Finance Minister Joe Ceci sees “green shoots” in the economy in forecasting a “modest” rebound of 2.6 per cent GDP growth, he insisted the government can’t afford to take its foot off the pedal.
“There are choices to be made,” Ceci told reporters at the provincial legislature.
“The choices we have made as a government is to continue to support Albertans with the necessary programs and services they require. I appreciate that other parties may feel differently about that, but that would make life more difficult and leave Albertans on their own.”
Ceci said the government had kept the increase in spending below the rate of inflation plus population growth, but total expenditures still hit a record $54.9 billion. The government is also building in a $500-million risk adjustment hedge against lower-than-expected energy revenue.
The budget pegs revenue at $45 billion, with the province forecasting an average oil price of US$55 a barrel for 2017-18 to increase non-renewable resource royalties to $3.7 billion. Corporate taxes are also expected to rise, to $3.9 billion, after a precipitous drop last year, while personal income tax revenue is forecast to slide to $11.2 billion.
There are no new tax increases in the budget.
The government expects to collect more than $1 billion from its new carbon tax this year but has pledged to keep those dollars out of general revenue and to use it for green infrastructure, energy efficiency and rebates.
There are no dollars in the budget for Calgary’s Green Line LRT expansion as the government pumps up capital spending to $9.2 billion.
But the province announced a new long-term care facility for Calgary, as well as five new schools in the city as part of an overall 24 new and modernized schools in the province.
The major new infrastructure item announced in the budget, though, is a new hospital for Edmonton, with $400 million earmarked for planning and development of that project over the next four years.
Alberta is borrowing $5.9 billion for capital and $6.3 billion to fund operating costs. The province’s debt is projected to hit $45 billion this year, increasing to $71.1 billion by 2019-20.
Debt servicing charges are estimated at $1.4 billion this year, increasing to $2.3 billion in 2019-20.
The soaring deficit and debt levels attracted fierce criticism from opposition parties who had called on the NDP to balance the budget before Ceci’s target of 2023-24.
The Wildrose official Opposition called the budget a “debt-fuelled disaster.”
“The NDP have made clear they not only have no plan to balance the budget, but they have no intention of ever balancing the budget,” said Wildrose finance critic Derek Fildebrandt.
“The premier and her finance minister are neglecting even the most basic fiscal controls … the mess they are creating today will take decades to fix.”
Interim Progressive Conservative Leader Ric McIver said the financial picture in the budget is even worse than the current fiscal year — where the province is projecting a $10.8-billion shortfall — because this year’s financial woes stem in part from the Fort McMurray wildfire.
“They haven’t even slowed down on how fast they’re taking Alberta over the fiscal cliff,” said McIver.
The financial blueprint also raised concerns among business groups, with the Calgary Chamber of Commerce saying in a statement that “hope is not a strategy.”
“What businesses mainly want is for government to not make it any harder to survive in these challenging times …. A massive deficit creates additional current and future financial burden for all taxpayers,” said chamber president Adam Legge.
The NDP budget did make some stakeholders happy, with University of Calgary president Elizabeth Cannon praising the government for giving post-secondary institutions a two per cent increase in tough times and for putting $270 million over four years toward redevelopment of the university’s MacKimmie Complex.
Mary Martin, president of the Alberta School Boards Association, welcomed the new schools. But she said the government needed to put more dollars into per-pupil funding that has eroded in the face of inflation.
“Absolutely,” said Martin. “I can understand that this is a challenging time provincially for this government. I recognize they had some tough choices to make, but we can’t make those choices on the backs of the kids we serve.”
Health remains the biggest part of the budget, at $21.4 billion, a 3.2 per cent hike over last year despite government pledges to “bend the curve” and bring the annual rate of increase down to 2.5 per cent.
The government’s projected spending levels don’t include potential raises for public sector workers under new contracts.
The Alberta Union of Provincial Employees, the United Nurses of Alberta and the Health Sciences Association of Alberta all see their contracts expire this year, while the Alberta Teachers’ Association has been bargaining since last summer.
Ceci said he wouldn’t negotiate in public but suggested the government has had some success in reducing compensation, pointing to $500 million saved through a renegotiated agreement with the province’s doctors.
Public sector compensation amounts to 56 per cent of expenditures, and opposition parties have called for a wage freeze.
AUPE president Guy Smith doesn’t expect the government to show its hand in bargaining but said salary increases would have only minimal impact on the deficit in any case, noting that a one per cent raise for unionized departmental employees amounts to $14 million.
“If you look at a budget that size, it’s a drop in the bucket,” he said. “That budget has lots of room to have negotiations happen.”
Despite a hiring restraint program in place, full-time equivalent positions within the government are expected to grow by 871 to 31,576.
When the health and education fields are added, public sector FTEs will increase by 2,822 to total 207,678 positions.
Ceci said stronger energy prices and a revived economy, combined with keeping spending increases below inflation and population growth, will lead to surpluses by 2023, if not sooner.
“This is a path back to balance.”
Unlike previous years, there will be no advertising campaign to accompany this budget, said Cheryl Oates, press secretary to Premier Rachel Notley.

Julie Ali · 
The deficit in Alberta is large and growing. We will have some money coming in with the greenwashing GST of the carbon tax but the GOA has told us they won't use it for the regular expenses of government. I'd like the Auditor General of Alberta to confirm this matter. In my opinion the money from the carbon tax -if not returned to citizens in the sillly rebate program will be used for the regular expenses of government.

The deficit results in debt servicing charges that we have to pay back; avoidance of major debt could have allowed us to put debt servicing charges to better use such as for increasing funds to the continuing care sector.

The failure to plan by the PCs in the past is now compounded by the failure of the NDP folks to limit our expenditures.
It's like we are stuck between folks who cannot save money and folks who only know how to spend money.
Where is the fiscal middle ground? Nowhere to be found.
LikeReplyJust now
Glenn Kelso · 
Pay attention, people of BC. With a no development and mega social programs spending NDP in power, structural deficits worse than this could be our fate.
LikeReply22 hrs
Steve Brown
The obvious question here is HOW? with all Alberta's OIL royalties how is this even possible!
LikeReply118 March 2017 09:53
Ivan Hadanoff · 
Trust goverment to turn a flowing spigot of money into bankruptcy
UnlikeReply118 March 2017 10:39
Marie Irene
The previous conservative governments weren't able to balance Alberta's budget in five of the last six years when oil was averaging about $90 a barrel, Notely's government has struggled with oil bottoming out and a major forest fire in Fort McMurray. The current price of oil is around 48-49 dollars, big difference
LikeReply218 March 2017 12:24
Marie Irene
Look to Ontario to compare to BC. Ontario's Liberal's budget will run a $5.2-billion deficit. The government will stay in a deficit position for years., The Liberal's will have to raise taxes, sell off assets or make deep cuts to balance the books.
Achieving a budget balance they’ used the sale of public assets, and new revenues, they will sell anything that isn’t nailed down. Alot like our BC Liberals.
The Ontario Liberal's debt projects upwards to $350 billion, The Liberals s since 2001 had listed the Teachers’ Pension Plan and the Public Service Employees Pension Plan fund as assets in year end statements.
The AG warned the government this year that she disagreed with the practice because it had no actual means to access the cash in each fund, and instructed the government should no longer list the billions in each fund as assets.
In Ontario some people are paying as much for hydro as for rent. People in Ontario are not very happy with their Liberal government either.
LikeReply218 March 2017 08:15Edited
Ivan Hadanoff · 
It is probably too late for Ontario. They have solen so much money from their kids and now the interest payments have come home to roost
LikeReply18 March 2017 10:41
Glenn Kelso · 
Marie Irene, the NDP is the only party that is one nationwide organization. The BC Liberal party has no affiliation with the Ontario Liberals and their MO and outcomes are polar opposite. Our province's debt to GDP ratio is just 16.1 percent. Ontario's is 40.3 percent (BTW, Quebec's is 48 percent). BC has the best economy in Canada and the country's only AAA credit rating.
LikeReply22 hrs
Julie Ali · 
Glenn Kelso Currently the economy in BC is better than that of Alberta. I don't know why. It seems to be all the foreign money that is being let in by both the provincial and federal governments.

I am especially concerned about Anbang. This group is mysterious and is buying up assets globally.

Why have the Liberal government in Ottawa and the Liberal government of BC let them into Canada without deep scrutiny? It is alarming to think of seniors being taken care of by such an investment group.
Explain approving China firm’s $1-billion deal for B.C. retirement home chain, Trudeau government told

"also the Investment Canada review process having a lack of transparency is totally unacceptable. It’s been that way for years through Liberal and Conservative governments.”
LikeReply6 mins
Mark Zain
Alberta NDP Cutting Conservative Decades of Mismanagement, Incompetence, and Fiscal Waste - Work in Progress

"Government Cuts CEO Pay and Bonuses at Agencies, Boards and Commissions"
http://www.edmontonsun. com/2017/02/24/government-cuts-ceo-pay-and-bonuses-at-agencies-boards-and-commissions

"Notley Government Cutting Executives’ Pay at 23 Agencies, Boards and Commissions"
http://globalnews. ca/news/3271471/notley-government-cutting-executives-pay-at-23-agencies-boards-and-commissions/

- "Perks such as signing bonuses, golf club memberships and housing allowances are also being dropped."
- "Ceci said the government is acting in an area where the previous Progressive Conservative government failed."
“They failed to act when bonuses, perks and benefits got way out of line,”

Too bad, we can't do that here with the BC Hydro, Translink, BC Ferries, ICBC, Coastal Health Authority, BC Pension execs. But still not too late, we have about a month left to change all of this.
LikeReply116 March 2017 20:33
John Robertson · 
10.8 billion deficit last year, 10.3 billion this year, 45 billion debt at end of year and 71 billion debt by 2020. No plan in place to balance budget, oh maybe by 2024 this is what NDP governments give you. Be very careful BC if you elect a NDP government you will be facing the same kind of deficits in the future. Can't wait until the PCs and Wildrose unite and get rid of these NDP clowns in 2019.
LikeReply717 March 2017 13:40
Steve Hegedus · 
Notley is a financial incompetent! NDP governments are good at spending other people's money. In the last two decades only the Saskatchewan NDP has been financially responsible ...... that's the way of it. For all her cuts, her spending outstripped it. No revenues, heavy spending equal deficits....... I wonder if Little Potato has learned something ...... probably not
UnlikeReply217 March 2017 19:27
Marie Irene
LikeReply18 March 2017 17:10Edited
Julie Ali · 
1) The cuts to the ABCs -agencies, boards and commissions is minor and of a cosmetic nature. Deep and wide cuts are needed.There also needs to be more than cuts such as amalgamation of some of the agencies. We don't need Covenant Health where the CEO is getting paid major bucks. We can have one health authority and save in administrative as well as executive staff compensation by the amalgamation of the two authorities.
2) We don't need 61 education boards with 61 expensive superintendent positions. We could make a province wide school board with trustees from all over the province. The salaries of the superintendents need pruning.
3) We have many GOA employees earning over $100,000 per year and where are their deliverables? Cuts are needed in positions and salaries.
4) Universities need funding cuts and tenure needs to end.
5) Technical colleges like NAIT give us far more value for our money; funding should increase for NAIT.
LikeReply27 mins
Julie Ali · 
Steve Hegedus Although there is some need for infrastructure investments I find the decision making tree at the GOA puzzling. There is a need for long term care beds but instead of the 2,000 long term care beds, an acute care hospital is being built in southwest Edmonton. I don't see how this will help the scarcity in the continuing care sector where seniors end up in acute care beds as "bed blockers".
It's troubling to note that the government has no sort of understandable decision making tree for billions of dollars in expenditures.
The failure to limit the expenses by cutting ABCs (agencies, boards and commissions) as well as the failure to cut public sector jobs and wages will only mean harder decisions in the future.
The PCs failed at the work of government and the NDP folks are simply repeating the bad governance.
LikeReply12 mins

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