Awash in a sea of debt

It appears Alberta’s sea of red ink is going to get even deeper before the signs of economic improvement will have a buoyant effect on the province’s economy.

CALGARY — It appears Alberta’s sea of red ink is going to get even deeper before the signs of economic improvement will have a buoyant effect on the province’s economy.

Alberta was awash in oil revenues and the envy of the nation with a 15-year string of surplus budgets that had helped the pay off $25 billion in debt accumulated in the 1980s and early 90s. But the province has been hit by a recession and falling energy prices and the debt is piling up again.

Ed Stelmach’s Progressive Conservative government had already projected a record $4.7 billion shortfall when it unveiled its budget in April and a Finance Department official disclosed in late June the number was closing in on $7 billion.

The first quarter financial update is next month.

“More than likely it will be higher but we’ll have the first quarter report, I believe, at the end of August and that will give a better picture of the first four months,” conceded the premier.

“Remember last year? The first quarter report was showing a small surplus — we got to the second quarter with $145 (a) barrel oil and everyone’s saying — oh boy how we gonna spend all that money? Well, by the end of the year it was down to $35.”

There are some “green shoots” of improvement, said Stelmach including renewed investment in the oilsands and with agricultural commodity prices. But resource revenue is still a problem.

“We do have very, very low gas prices. Gas in storage is at abnormally high levels and so that’s going to take away from the revenue stream to the province.”

“We also have to remember that a province does not recover its revenue stream until at least a year after the private sector does better.”

The Canadian Taxpayers Federation said the deficit is spiralling out of control.

“Even here in B.C. the government started out by saying it was only going to be roughly a $500 million deficit and now they’re saying its going to be much bigger. It’s no surprise that Alberta is saying the same thing,” said Maureen Bader, the B.C. director for the Canadian Taxpayers Federation.

“The recession is probably deeper than what they were first imagining and until natural gas prices recover government revenues aren’t going to recover. But ultimately at the end of the day the deficit is caused by out-of-control spending.”

Just Posted

Red Deer group looking to keep roads safe for cyclists

A Red Deer cycling group is concerned about road safety after multiple… Continue reading

Smoke and pets do not mix

Take care of your pets during the smoky weather

Former Red Deer lawyer sentenced

Charges included possession of stolen property

Man causes mischief with axe in Ponoka

Arson and attempted break and enter charges laid

WATCH: Raising money for kids at the Gord Bamford Charity Golf Classic

Former NHL players, Olympians, pro rodeo circuit members and musicians teed off… Continue reading

Oilpatch fears delays as U.S. judge orders further review of KXL pipeline route

CALGARY — Potential delays in the completion of the Keystone XL pipeline… Continue reading

‘Queen of Soul’ Aretha Franklin dies at 76

NEW YORK — Aretha Franklin, the undisputed “Queen of Soul” who sang… Continue reading

Arrests in Burnaby, B.C., as order against Kinder Morgan protest camp enforced

BURNABY, B.C. — The RCMP arrested protesters Thursday as officers enforced a… Continue reading

‘Hot and dirty work:’ Commander describes fighting massive Ontario wildfire

BRITT, Ont. — From a helicopter flying over a smouldering swath of… Continue reading

Calgary Fire Department logs record opioid overdose calls in July

CALGARY — The Calgary Fire Department says there were a record number… Continue reading

RCMP in Burnaby, B.C., say Kinder Morgan protest camp to be dismantled

BURNABY, B.C. — The RCMP arrested protesters when officers enforced a court… Continue reading

Study: Smokers better off quitting, even with weight gain

NEW YORK — If you quit smoking and gain weight, it may… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month