Latest financial update paints less-than-rosy picture
The provincial government’s latest financial update released February 19 shows a higher than predicted quarterly deficit of just under $2 billion. Though that’s worse than what government officials had estimated earlier in the year Alberta’s third quarter financial status comes as no surprise to opposition party members who criticized the budget’s reliance on high energy prices.
With oil selling at about $7.50 less per barrel now than it was when the budget was written in March 2012 Alberta’s resource revenue is down $2.4 billion. Half a billion dollars paid out in emergency assistance for forest fires and hail damage last year has also gouged provincial coffers. Higher than expected income tax revenue and lower expenses helped offset the budget a bit but the annual deficit is now predicted to be between $3.5 and $4 billion.
In response Finance Minister Doug Horner announced an immediate pay freeze for MLAs and management staff starting April 1.
“Our government is leading by example. With a slimmed down cabinet an eight per cent MLA pay cut and a pay freeze for MLAs today we’re taking action on management salaries” Horner said in a press release. The government has also promised to cut 10 per cent of the public sector’s managerial staff over the next three years.
Yet opposition parties say these measures are primarily for optics as they will do little to save enough money to solve budget issues. Alberta Liberal Party Leader Raj Sherman and Liberal MLA Kent Hehr are calling for increased corporate taxes instead.
