Alberta government revenues are expected to be down more than $10 billion when Finance Minister Travis Toews delivers an update next week.
The minister provided the sobering sneak peak at the province’s books at Red Deer College on Thursday where about 60 gathered to hear how the government plans to restore Alberta’s economy.
“I don’t want to be a downer because overall I’m quite optimistic,” said Toews.
“Right now, based on what we can see, revenues will be down well over $10 billion,” he said at the event organized by the Red Deer and District Chamber of Commerce. “And out of a $50 billion revenue budget for 2020 that’s a pretty significant hit.”
With those kinds of numbers Premier Jason Kenney’s pledge to balance the budget in his government’s first term is unrealistic, he said.
“Short of a miracle, that will not be possible.”
While balancing the budget remains a high priority, “realistically to try to do that in the next three years would create immense hardship and disruption to Albertans.”
Given the economic pummelling Alberta has taken because of a low global oil prices and the pandemic, the government has had to reassess its finances.
“We’re in the process of not only reevaluating our fiscal plan but starting to prepare for budget 2020-21, which will be a reset budget.
“We are identifying fiscal anchors that we can use during this time until we get to the point when we can identify when we can balance the budget in this province.”
To balance the books, the province will have to deliver the most efficient government possible, he said.
The Blue Ribbon Panel on Alberta’s Finances made clear in its report that changes needed to be made in government spending.
“Their conclusion was that Alberta has a spending problem and has had one for a long time,” he said, adding it was a symptom of the province’s previous economic prosperity.
Financial challenges often arise out of business decisions made during good times, he said.
The bulk of Toews speech was outlining progress being made in the province’s economic recovery plan, which was rolled out in June — the first province to do so.
Key components of the plan include business tax cuts, a fast-tracked infrastructure program, eliminating red tape and offering incentives geared towards businesses poised to grow.
Growing Alberta’s economy will be the path to restoring prosperity, he said. The government’s role in achieving that goal will be to create the most competitive investment environment possible so that businesses can flourish and innovate.