EDMONTON, AB): This week’s second quarter fiscal update shows that spending and tax increases, record borrowing and a crippled economy continue to scare investment away from Alberta’s economy, the Wildrose Official Opposition said today.
The eye-popping $10.8 billion deficit announced today comes with a $14 billion drop in net financial assets and annual debt increasing to over $11 billion – nearly $700 million more than was forecast when the budget was passed. The deficit increase comes in spite of increased revenues of nearly $2 billion from royalties, federal transfers and Heritage Fund returns.
Despite the NDP promising increased revenues through a 20 per cent hike of the business tax rate during the 2015 election campaign, corporate revenues are down almost $900 million more than was forecast.
“No one is blaming the NDP government for the price of oil, but their financial and economic policies continue to drive our balance sheet into the ground,” Wildrose Leader Brian Jean said. “Despite overall revenue increases, our deficit and debt is higher today than the NDP promised last April. Without changing course, the NDP government’s budget will continue to take Alberta in the wrong direction.”
Wildrose Shadow Finance Minister Derek Fildebrandt said the government can find simple and immediate savings through stopping its billion dollar shut down of coal or ending its $200 million plan to maintain out-of-date government-run linen services.
“Anyone looking at this balance sheet meltdown will see that unless a serious spending reduction is made that taxes will continue to go up,” Fildebrandt said. “They are destroying investor confidence, destroying every last piece of the Alberta Advantage and putting the health of our province at risk.”
Annual interest payments on Alberta’s debt is now over $1 billion per year, quickly becoming one of the biggest line items across government. Alberta spends roughly $2,000 per person more than BC on program spending.
Last March, Wildrose released 10 recommendations that would reduce operational spending by $2 billion without harming front line services.