Eliminating Alberta’s budget deficit by 2012 will not involve raising taxes, promised Minister of Finance and Enterprise Ted Morton at a breakfast hosted by the local Progressive Conservative Association on Tuesday.
“We’re going to do that without raising taxes, without raising net debt and while still maintaining strong funding for health, education and public works,” he told the crowd.
With government revenues down significantly and both Canada and the United States still reeling from aftershocks of the recession, Morton acknowledged that it’s been a tough year for Alberta.
“We’re into our third deficit in a row this year and we’re predicting one more for next year,” he noted.
The province’s ability to sustain itself is due to the sustainability fund, a savings account that the government built up to $18 billion between 2001 and 2008.
“That has allowed us to distinguish between deficits and debt,” said Morton. The province is expected to go another $4.7 billion into the red again this year.
He said the fund has allowed the province to sustain funding at significant levels for capital projects, infrastructure, health and education.
Morton also spoke frankly about the decrease in government revenues, particularly natural gas. That area of revenue, said Morton, is not only down, it’s gone for a long time thanks to new technology that has unleashed a 200-year supply of shale gas in the United States. Shale gas is also booming in northeastern British Columbia and to a lesser degree in west-central Alberta.
“So that $8, $10, $12 gas that we were seeing in the early part of the past decade, all based on exports to the U.S., that’s all gone,” he said.
“That’s why you see gas at that $4 plus or minus rate now and the bad news is that that’s not going to recover.”
