Alberta Finance Minister Doug Horner: not time to talk about taxes, yet

CALGARY – Alberta’s finance minister says plummeting oil revenue means the next Alberta budget isn’t going to be pretty, but the province isn’t ready to consider raising taxes — yet.

“This is not going to be a fun budget. This is going to be a budget that will show that we are serious about reining in spending,” Doug Horner told a Calgary business audience on Monday.

In the medium term, he said, there’s still the opportunity to trim spending and work to make sure government services are being delivered in the most efficient way possible.

“And then you can probably have a discussion about whether or not we have the right mix of taxation to accomplish the job, but that’s a little ways out yet.”

The “tough” 2013 budget, which Horner is set to deliver on March 7, will explore “different ways of doing things” and “belt-tightening,” but no new taxes to shore up the revenue side, he said.

“The first thing that we do is we look to our own house before we dig into the pockets of those in your house,” Horner told reporters.

That echoes a commitment Premier Alison Redford made earlier this year.

But Horner said there are serious structural issues with the province’s finances.

Alberta’s coffers are being hit hard by the steep discount oilsands producers are getting for their crude versus other varieties. Alberta’s limited access to markets means its bitumen is fetching about $40 a barrel less than West Texas Intermediate, a benchmark for landlocked U.S. light crude.

The price gap widens to $50 when Alberta crude is compared to international benchmarks that can access the most lucrative markets by sea.

A number of pipeline proposals to the east, south and west are in the works to expand market access for Canadian crude, but that won’t fix the situation in the near term.

Horner says the province has been through tough times before, but this time it’s different.

“Alberta has long been well-positioned to weather economic storms. We came through the 2008 recession better than most other jurisdictions,” Horner said in his speech.

“We’re accustomed to the ups and downs of resource prices and we’re used to the boom and bust. But this is not your average storm. This is a structural change in our key commodity and we must do more than wait for the storm to clear, and we are.”

The provincial government held budget consultations in the fall with more than 6,000 Albertans.

In a report Monday, the province says Albertans want the province to save in good times and bad and to diversify the economy away from oil and gas. Respondents to the survey were also open to the government borrowing money to pay for infrastructure, so long as it’s in a responsible way.

Alberta doesn’t have a provincial sales tax and adopting one has been discussed by pundits as Alberta looks to cut its deficit, forecast for this fiscal year is between $2.3 billion and $3 billion.

In order to introduce a sales tax to Alberta, however, there’s a law on the books that requires a referendum and changing that rule is “not on the table for me to do,” Horner said.

Rob Anderson, finance critic of the Opposition Wildrose party, said the survey is meant to justify the Progressive Conservative government’s “reckless fiscal agenda.”

“Redford did not campaign on running billion-dollar deficits and picking up debt for future generations to pay for through higher taxes because it does not reflect the priorities of Albertans,” Anderson said.

“Albertans want government to live within its means and prioritize spending on needs versus wants, something this government just doesn’t understand.”

Horner told reporters that numbers are still being crunched, but balancing the budget will be a challenge.

“Is it going to be really, really tough to do? Absolutely. The longer the situation persists, the harder that’s going to be.”




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