Alberta Premier Rachel Notley addressed her province from her kitchen table on Thursday evening. Here are her prepared remarks. The text refers to charts, which you can reference in the video above.
Hi. I’m Rachel Notley.
I’m speaking to you tonight from my kitchen table. This is where my family comes together to make our plans – just like you probably do around your table. And so it feels like the right place for us to speak together about the plan ahead for Alberta.
Let me start by saying this. Alberta’s biggest strength is our people. I’ve been travelling the province talking to Albertans about the budget and this strikes me everywhere I go.
There’s no doubt that the oil price collapse is causing serious economic pain and anxiety. Albertans are worried about their jobs and their future. It’s a scary time for many families.
So that’s why I wanted to talk to you directly tonight …
… so that I can go through the numbers and outline what we’re up against …
… and so that I can walk you through our plan to get us through this storm.
Finally, I have a few specific asks of you, to get us where we need to go.
Almost a year ago, Albertans elected a new provincial government. And we’ve worked hard to keep our promises.
We said we needed to take big money out of politics. And we have, with tough new reforms.
We said that our tax system needed to be modernized. And it is. Today, Alberta’s system is fairer. Those at the top are paying just a little bit more to help us through a tough economy.
Related reading: Alberta’s fate is Canada’s fate
And, the same time, Alberta maintains the lowest taxes of any jurisdiction in Canada with no sales tax, no payroll tax, and no health care premiums.
We said the previous government’s plan to cut health care and education didn’t make sense.
Reckless cutbacks only make things worse. So we stopped those cuts.
And we said our environmental policies were stuck in the past. That was putting our economy at risk by blocking our access to new markets. So we fixed that too, announcing a Climate Leadership Plan that will create new jobs and erase any doubt about our environmental record.
Much has been accomplished in a few months. But there’s more to do.
Most importantly, we need to manage the serious problem handed to us by the international economy.
That will be the focus of the provincial budget we will be presenting next week. And that’s what I want to talk to you about tonight.
Related reading: How to fix Alberta’s $10B budget hole
Let’s look at the numbers.
In the past year and a half, the price of oil has dropped by over two-thirds – from a peak of more than $105 per barrel in the summer of 2014, to less than $30 per barrel in January.
Now, we’re Albertans. And we’ve seen oil prices go up and down. But there is no question that this is a very serious and prolonged shock, the most dramatic in generations.
And it is having a very severe effect on Alberta families, communities, and on the provincial budget.
As you can see here, the lower price of oil is having a direct effect on jobs.
Related reading: Alberta’s unemployment rate surpasses Quebec’s
Unemployment has increased significantly as drilling activity has dropped, just as it has in energy producing jurisdictions across North America and around the world.
And as you can see here, our provincial budget has received a serious blow as a result of the low price of oil.
Two years ago, the province of Alberta collected almost $10 billion from royalties. Next year, we’re projecting that royalty revenues will drop by almost 90 per cent.
This is the royalty rollercoaster we’ve all been talking about.
Our province depends on those oil and gas royalties for one-fifth of our provincial revenues.
So we’re dangerously dependent on the price of oil – and our health and education services are very vulnerable. And that’s a dependence we need to reduce.
In the meantime, the oil price shock goes right to our province’s bottom line.
ollar for dollar, lower royalties mean a higher deficit. And owing to the economic slowdown, revenues from other taxes are lower as well. This year, the deficit will be more than $10 billion. And year over year, that deficit will come down and go back into balance as the economy recovers.
Related reading: Shannon Phillips, Alberta’s minister of hard hits
In the face of this fiscal challenge, Albertans confront a choice.
On the one hand, we could choose to slash public services, firing thousands of teachers and nurses and cutting supports to seniors and families. After all, governments in Alberta have made that choice before.
But the impact on families was severe. Reckless cuts only download the cost of deficits onto Albertans, creating more economic pain and more anxiety.
And they do nothing to address the most important economic challenge facing our province: Alberta’s economy is just too dependent on the price of oil. And that must change.
And so that’s why we’re making a different choice. A better choice.
We will not be slashing and burning the programs and services that families count on. But rather, with a prudent and stable plan we will accomplish two important goals.
Related reading: The death of the Alberta dream
First, we need to ensure that we control costs and spend tax dollars wisely.
And second, we need to create jobs and foster economic diversification.
Let me start with controlling costs. Since taking office last year, we have combed through government to find savings. For example, we’ve frozen salaries for members of Cabinet, MLAs and political staff until after the next election. We’ve also frozen salaries for senior public servants for the next two years.
And we have taken a careful approach to delivering on our own campaign promises – slowing down their rollout and reallocating savings to where they are needed most.
At the same time, we have acted to protect vital public services like health care and education.
But we can afford to make this choice because Alberta has a significantly lower debt to GDP ratio than Canada and other provinces. In other words, we have the fiscal capacity to protect the health and education services your family counts on.
But we must stick to a plan that carefully brings the budget back into balance as the economy recovers.
So here are the targets we’re working to achieve.
This chart shows the rate of spending growth in the Alberta budget over the last number of years. As you can see, spending grew very quickly and unpredictably under the previous government.
As a result, it was often difficult for school boards, health authorities, government agencies and other government partners to plan ahead. This fueled waste and inefficiency.
You can see spending has started to come down under our government. That’s what we’re going to continue to do.
Vital public services will be maintained and funded responsibly.
Some programs will change and other priorities will be implemented more slowly. But let me assure you that we will always keep a keen eye on the consequences of every decision we make.
And we will base those decisions on core values, like protecting the most vulnerable, ensuring everyone is provided with equal opportunity, and asking those who can to contribute their fair share.
So controlling costs is the first pillar of our plan.
The second pillar is the Alberta Jobs Plan to create jobs and diversify our economy.
The Alberta Jobs Plan has four key components:
- supporting families and communities;
- investing in infrastructure;
- diversifying our energy markets; and
- supporting Alberta business.
Now we will be spelling out additional details on the Alberta Jobs Plan next week in the budget.
But let me highlight a few key points:
First, to support families and communities, we are taking action to provide help to those who are most vulnerable, particularly children. So starting this summer, Alberta families in need will benefit from the new Alberta Child Benefit Plan. This plan helps ensure no child goes to school hungry by helping families who are having a hard time making ends meet. So for example, a low-income single parent with two children will begin to receive just over $3000 a year in benefits from enhancements to the Alberta Child Benefit and the Family Employment Tax Credit.In all, 380,000 children are going to benefit from this initiative.
If you would like to know more about new help for families with children, I will point you to a web-site that has all the details at the end of this talk.
Second, the Alberta Jobs Plan invests in Alberta’s infrastructure. The former Bank of Canada Governor David Dodge advised us that now was the time to make these investments to create jobs and make our economy more competitive. And so we are acting.
In our budget next week, we will be setting out more details of our five-year $34 billion plan to build new schools, hospitals, roads and transit throughout Alberta. These infrastructure investments will create jobs today and benefit our children and grandchildren for generations to come.
Third, the Alberta Jobs Plan diversifies our energy markets and our energy industry. For example, the Climate Leadership Plan will help grow our renewable sector, build new green infrastructure, support energy efficiency, and drive new technologies that will add to our exports. And we are taking action to open up new markets.
I want to emphasize this point. Every Canadian benefits from a strong energy sector. But we can’t continue to support Canada’s economy, unless Canada supports us. That means one thing: building a modern and carefully-regulated pipeline to tidewater.
We now have a balanced framework to develop our industry and every government in Canada understands this issue must be dealt with.
But I can promise you this: I won’t let up. We must get to ‘yes’ on a pipeline.
Finally, the Alberta Jobs Plan includes concrete action to support private sector job creators.
In an economic slowdown, businesses can find it hard to access the credit and investment capital they need to grow their businesses and create jobs. That’s why our government has implemented initiatives to give businesses and entrepreneurs the capital they need to weather the economic storm.
- We’ve increased capital to the Alberta Treasury Branch by $1.5 billion to support lending. I was pleased to see the ATB announce that it has increased loans to small and medium-sized business by $335 million in the fourth quarter of last year.
- And the Alberta Investment Management Corporation is allocating a half billion dollars to Alberta companies with growth potential.
- And instead of shipping our raw resources and the jobs that go with them, through the Petrochemical Diversification Plan our government is helping Alberta attract billions of dollars in new investment, adding value to our products right here at home, and creating thousands of long-term jobs.
Next week in the budget, we will be making significant new announcements aimed at supporting business to create jobs and diversify our economy.
So I encourage you to tune in.
These initiatives – indeed every action my government is taking – are aimed at achieving two important goals:
Controlling costs and creating jobs.
Not slash and burn.
But a prudent approach to funding government services that provides certainty and stability.
Because in Alberta, we look after each other.
We pull together.
We do what we need to do.
So here is what I’m asking you to do. If you and your family are experiencing a reduction in your family income you’re not sure you can handle, please be sure to apply for the new Alberta and federal child benefits. There is some very significant help there for families and children.
If you’ve lost your job, look into the new EI benefits and look into the many provincial training and retraining resources to help you get ready for your next job.
And if you are a government partner delivering services to Albertans, please remember that Albertans want us to live within our means.
Albertans aren’t looking for any significant increases in public spending in times like these.
And to our partners, the private sector job creators of Alberta, I say this: We’ve worked hard to create new opportunities for you. Tune into the provincial budget next week … We’ll be announcing important new initiatives to promote job creation and economic diversification. And talk to us about how you can fit into Alberta’s capital plan, our business lending and investment programs, and the new job creation steps we’ll be setting out next week.
And to our partners in the federal government in Ottawa, I say this: We called on you to improve employment insurance, and you made progress. But you also have to do better. The decision to exclude Edmonton and surrounding communities from EI improvements needs to be fixed. And you need to give us the tools necessary to get through this tough economy ourselves. That means getting Canadian energy to new markets.
It is in everyone’s interest to ensure that the energy exports that ARE permitted under our Climate Leadership Plan get the best possible world price. We must get this done, or everybody loses. Let’s leave the divisive battles of the past in the past, and keep working together.
Let me conclude by saying this. We can do this. We’re flexible and resilient in Alberta, and we’ve always shown that when we’re faced with challenges we come together with optimism and determination. We can look after our children, and help each other through these tough times.
We can make better decisions about our economy, promote jobs and diversification and make Alberta stronger and more resilient to future price shocks.
We can manage provincial spending carefully and frugally. We can protect health care and education. And we can open up new markets for our energy – and we won’t give up until we do. And we can create jobs in a diverse and resilient economy.
Albertans can do it. We can do it, together. We have done it before, and we will again. Thank you for listening tonight.