On February 18th, 2015, the Minister of Finance, Robin Campbell, spoke to a group of about fifty people – mostly members of the Chestermere Chamber of Commerce to discuss the financial situation of Alberta. Members of Chestermere City Council were in attendance along with Chestermere Rocky View MLA, Bruce McAllister and many business owners of Chestermere.
Before diving into the hard questions regarding the financial mess Alberta is in, Minister Campbell took the time to praise Bruce McAllister for the great passion that he shows for Chestermere and other areas in his riding. “I don’t care what party you’re from, I can respect somebody who does a good job,” said Minister Campbell. The Minister went on to comment that he believes Mr. McAllister will win the nomination, is the best choice for Chestermere and will keep parliament grounded and focused.
The Minister began his remarks by stating that although the price of oil is low and there is concern for that, Alberta remains the best place to live in Canada and that Albertan’s have it pretty good. “We have some challenges with oil right now that we will deal with, but as a Province and as a place of opportunity, there’s no place in Canada that people would rather be”.
In 2014, over 100,000 people moved into the Province of Alberta and the Minister says that even in the situation we are in now as a Province, they are forecasting 60,000 – 70,000 people will move to Alberta in 2015. “Despite the low price of oil, there are still opportunities. There are great opportunities for young Entrepreneurs who are going to set up businesses and help this province grow”.
“The biggest shift that Alberta has seen of recent is the quick decline in the price of oil. Oil right now is 20% of our operating budget and now it’s declined by 15%. The biggest problem we’re facing in energy crisis right now is that we rely heavily on oil revenues. Today, oil costs about $52/barrel and we’re selling to an over supplied market place. Income tax is this provinces biggest revenue source and that can be affected when the price of oil slumps. I don’t know if the price fluctuation has stopped or if we’ve seen the bottom – all I can say is that the price of oil is low and will likely remain low for the near future”, said Minister Campbell when speaking to the oil crisis.
He went on to say that as oil sells right now at $52 per barrel, in 2016 we’ll likely see it selling at $62 per barrel and in 2017/2018 we’ll likely see it at $75 per barrel. “This will not be a short term fix. It is not business as usual and tough decisions need to be made”.
The Minister also stated that the Premier, Cabinet and all MLA’s are taking a voluntary 5% wage deduction as part of their commitment to exercise fiscal discipline and responsibility in these challenging times. Also, expenses for things like travel and trainings have been limited to on the absolutely necessary. The Minister reported that other organizations within the health care and education industries have also committed to reducing their spending and living within tighter budgets during this time however, will keep up the high quality of services that they continue to provide.
Minister Campbell echoed the remarks of that Premier Prentice had said when he visited Chestermere on February 14th regarding the unwillingness to have a Provincial Sales Tax in Alberta. Minister Campbell commented that he, the Premier and Albertans are not interested in have a sales tax and will not be moving ahead with introducing one in Alberta.
“All Albertans, old and new, need hospitals, schools, good roads and access to Government programs and services. Albertans have learned the hard way that when you defer investing in public infrastructure, it can take a decade to catch up. Our government will not make that mistake again. Public infrastructure will be, and is better for our quality of life. Even when the price of oil is low, we must still build schools, roads and hospitals or suffer the consequences. To support this investment, the government increases the forecast in capital plan of $7.3 billion this year. But we are separating the things that we must have from the things that we would like to have. Schools are a good example of things we must have. With the population growing over 100,000 per year, that equates to needing 28 new schools each year”.
“The good news is that Alberta is amazingly resilient and strong. Our forecasts for this year are modest, we are still in pretty good shape given the circumstances”.
Minister Campbell then went on to speak about taxes and how residents and businesses would pay $11 billion more in taxes each year under the tax system of any other province. We have no sales tax, no payroll tax and we have the lowest income tax in the country.
“Alberta has been through difficult times before and we will get through this one as well. The price of oil will rebound. Until then, we have tough choices to make and we want to hear from you about how we should tackle these fiscal challenges moving forward. Your feedback is important as we fix our fiscal foundation and move to a sustainable long term fiscal plan. We’ll make the right choices to restore the Provinces economic health and continue delivering on Alberta’s priorities”.
With all attentions now focused on the roll out of the budget, if what they say is true, Albertans should rest easy that although spending will be minimal, our key services by way of health care and education sound like they will be protected. Guess we’ll have to wait and see.
