Oil glut hampers Alberta budgeting

Premier Alison Redford spoke at the announcement of a renewed Premier's Council on Culture at NAIT in Edmonton Alta., on Wednesday Jan. 9, 2013. She spoke about Alberta's budgetary issues as well.

Credits: Ian Kucerak/Edmonton Sun/QMI Agency


EDMONTON - Alberta Finance Minister Doug Horner said he saw plunging oil revenues coming - just not this fast.

But with Premier Alison Redford's announcement of accelerated spending cuts even within the budget year, opposition critics hear the sound of promises breaking.
"This is not something that was totally unexpected. We saw it on the horizon. What's happening is ... how fast it's coming so, we have to make some adjustments," Horner after Monday's first Tory caucus meeting of 2013, adding that the whole country is being hurt economically by the bite bitumen has taken in price.

Wildrose Party house leader Rob Anderson scoffed.
"These guys are either completely incompetent or they're just not being truthful with Albertans," Anderson said.

"Horner said no one saw this coming in the legislature about five times in the fall session - he kept telling us no one could have seen this coming. And then today he changes his mind and says we did see it coming, we just didn't see it coming so quickly," Anderson said.

Redford blamed the dip on a projected surge in U.S. oil production and the need for more ways to get Alberta oil to tidewater and international markets.

"The more product we see on the market the more difficult it is to get the world price for our oil," she said.

Redford's campaign promise of balancing the as-yet undated 2013 budget went off the radar in the fall, and the $3-billion deficit remains firmly wedged.

Even balancing the operating budget is at risk, Horner said in December as the Tory government scrambled to cut fiscal corners, including a quiet move to slash home care minutes across the board in an effort to control in-budget costs.

Redford said Monday "tough choices" are on the table.
"We know as Albertans that we go through volatile times and this is certainly one of them," Redford said.

"What we are now talking about is doing the exact same work but at a much faster pace," she said of an earlier three-year pace for results-based budgeting. "We know Albertans want us to meet the priorities we've set."

Liberal Laurie Blakeman said Redford's pledge to increase Municipal Sustainability Initiative (MSI) funding to $1.6 billion annually starting in 2014-15 is in jeopardy, as is Redford's pledge to the Alberta Urban Municipalities Association not to balance the budget on the backs of municipalities.

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