Government says recession is over in fiscal update

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The provincial government has implemented a hiring freeze for non-union management jobs.

In its second quarter report Finance Minister Joe Ceci said Tuesday the Alberta economy is growing faster than previously thought. He raised the growth forecast from 2.6 per cent to 4 per cent.

Despite the growth, Ceci said the government plans a hiring freeze and hopes to see a wage freeze in current union contract negotiations which is expected to save the government more than $100 million.

But local critics say this is too little too late and won’t address ballooning provincial debt.

Even though the government announced that the province is out of a recession, Barrhead-Morinville-Westlock MLA Glenn van Dijken said that the deficit is still a big concern.

“We still have to budget very carefully in this province because we have a $10.3 billion deficit we need to solve. Its not going to get back to a balanced budget unless we get our spending under control,” van Dijken said.

Brian Bachynski, chair of the St. Albert Chamber of Commerce and publisher at the St. Albert Gazette, agrees with van Dijken and said that the operational costs and deficit are concerning.

After this year’s growth, the government predicts that the GDP would grow by a moderate 2.5 per cent in the next fiscal year.

The provincial unemployment rate is still forecast at eight per cent but according to the government, the province has added more than 70,000 full-time jobs since mid-2016. Ceci said that the jobs are mostly in the private sector. Some 11,000 jobs are in the public sector while 21,000 full-time positions created in the private sector.

The government says that of the 62,000 jobs that were lost during the recession, two-thirds have returned. The number of drilling rigs has doubled from the levels in 2016.

Tightening the belt

In the fiscal update Ceci said that the size of the province’s civil service would decrease through attrition. He said that front-line services in healthcare and education, such as teachers and nurses, would not be impacted by the hiring freeze.

Along with a hiring freeze, Ceci said that the government is extending the salary freeze for non-union and management employees until Sept. 30, 2019 and will save the province $100 million per year.

Ceci said that the government has found $300 million in savings this fiscal year through administrative efficiencies and program demand adjustments.

The finance minister said that the government wants public sector unions to accept a wage freeze in contract talks. Right now the province is negotiating with AUPE, the United Nurses of Alberta and Health Sciences Association of Alberta.

Ceci said that he would like to see the current contract negotiations have the same result as the deal the province made with teachers, which had a two-year wage freeze.

“That’s what my hope is … that people will see the benefit of long-term job stability and the fact that there are no raises, they’ll have their ongoing jobs,” he said.

For some, the wage freezes are too little too late. Bachynski said that ballooning debt will take years to repay.

“The province is still borrowing for operating costs, and it’s posting a $10.3 billion deficit. And only now is the NDP government talking about no salary increases for Alberta unions. The province’s finances would be in better shape had this government taken austerity measures when it came to power. With a debt forecast to rise above $42 billion, Albertans will be paying for the consequences of government inaction for years to come.”

Ceci said that the government plans to get to balance by 2023.

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Jennifer Henderson

Jennifer Henderson joined the St. Albert Gazette in 2016. She writes about municipal, provincial and federal politics; court and crime; general news and features.