The Wood Buffalo wildfire took a serious toll on Alberta’s economy. That's the message Albertans heard Tuesday afternoon as Finance Minister Joe Ceci gave the government's 2016-17 first-quarter fiscal update.
Trevor Horne, the NDP MLA for Spruce Grove-St. Albert, said the negative impact of the wildfires on this quarter’s fiscal results “wasn’t a huge surprise.” Ceci announced the forecasted provincial deficit for the year has increased $527 million to $10.9 billion.
“I’m optimistic that going into 2017 we’ll start to see some recovery,” Horne said, noting there will be rebuilding in Fort McMurray.
Horne was supportive of the finance minister’s repeated declarations that there would be no “kneejerk cuts” to services. Horne said he doesn’t think cuts would put Albertans into a good position.
Cuts might seem like a good idea initially, he said, but their impact would be felt in a few years.
“This recession won’t be put on their (Albertans) backs,” said Ceci during the news conference. “We’re cushioning the blow.”
Wildrose Barrhead-Morinville-Westlock MLA Glenn van Dijken wasn’t impressed with the results of the fiscal update.
“It appears to me that the NDP fiscal plan continues to take Alberta down a dangerous path,” van Dijken said on Tuesday. He said the government needs to get serious about getting spending under control, and it seems the government’s only plan to dig Alberta out of deficit is to hope for higher commodity prices.
The $877 million decrease in estimated corporate tax revenue for the 2016-17 fiscal year is an indication that corporations can’t turn profits in the current business environment, van Dijken said. He said moves like a planned increase to minimum wage and the carbon taxes will make things worse.
He did see hope in the fact that the price of West Texas Intermediate was higher than originally forecast during the first quarter.
While Ceci highlighted the impact of the Wood Buffalo wildfires, van Dijken noted that there is a significant amount of money coming from the federal government to help, plus said the government’s original wildfire budget was inadequate.
“There was some poor budgeting to begin with,” van Dijken said.
The government expects about $300 million in lost revenue from the wildfire, due in part by the impact of 40 million fewer barrels of oil production.
The wildfire went far beyond the $246 million originally allocated for disaster and emergency assistance this fiscal year, costing $647 million, though the province expects $452 million will be recouped from federal transfers.
Horne acknowledged it’s a tough economic time for people, but pointed to the optimistic forecast in the fiscal update that predicts a 2.4 per cent increase in real GDP in 2017, fuelled by rebounds in oil production, wildfire reconstruction, public-sector infrastructure investment and improving oil prices.
The forecast calls for the economy to shrink by 2.7 per cent this year.
Ceci said his fiscal plan is a “non-austerity plan” with support from many economists.
