Skip to content

Deficit $1.3B lower than expected

EDMONTON — Alberta’s bottom line is looking less saggy, but critics say the province is getting financially fit by blind luck rather than through prudent planning.
Alta Fiscal
Alberta Finance Minister Lloyd Snelgrove speaks to the media about the 2010-11 annual financial report

EDMONTON — Alberta’s bottom line is looking less saggy, but critics say the province is getting financially fit by blind luck rather than through prudent planning.

Finance Minister Lloyd Snelgrove announced Wednesday that the province posted a $3.4-billion deficit in the fiscal year that ended March 31. That’s $1.3 billion less than the projected deficit of $4.7 billion.

Snelgrove credited higher royalties from oilsands operations along with departmental cost cutting. The governing Conservatives are also stretching out some capital construction projects to save money.

“We’ve held the line on spending,” Snelgrove told a news conference at the legislature.

“Alberta continues to be in one of the strongest positions of all the Canadian jurisdictions,” he said.

Revenue from Crown leases and investment income were also higher than projected.

Snelgrove rejected suggestions from opposition politicians that Premier Ed Stelmach’s government was simply fortunate because the price of oil — Alberta’s industrial staple — is rising.

“You hunt where the ducks are,” he said. “We’re sitting on one of the largest deposits of hydrocarbons in the world. It would be folly to not make the best use of that asset that we can.”

Snelgrove also announced that the provincial economy grew by 3.8 per cent in fiscal 2010.

The province’s Sustainability Fund, which the government has been using in recent years to cover off multibillion-dollar budget deficits, is now at $11.2 billion — about $3-billion more than expected.

Revenue was $34.9 billion, $886 million more than forecast.

Spending was $38.3 billion, $452 million lower than forecast.

Snelgrove said one area where the government didn’t hold the line on spending was in health care, which went up $1.9 billion to $15 billion.

“This increase recognizes the priority Albertans place on our publicly funded health-care system.”

NDP Leader Brian Mason said the numbers reflect a government that practises “fire brigade budgeting” — throwing millions of dollars at emerging problems such as health care with little regard for overall planning or cost saving.

He said the government could redirect millions of dollars that currently go to projects such as the horse racing industry, a new home for the lieutenant governor and experiments to reduce greenhouse gases by liquefying and storing them underground.

“Good government is about setting the right priorities,” said Mason.

Both Mason and Hugh MacDonald, the Liberal finance critic, urged the government to give $100 million of its unexpected savings to school boards provincewide that have had to lay off hundreds of teachers to meet their budgets.

“Before Canada Day, (I hope) this government will change its mind, subtract $100 million and provide it to school boards,” said MacDonald.

Snelgrove said the government already generously funds education to the tune of $6.2 billion a year and how school boards use the money is up to them.

“It isn’t something that the Alberta government takes lightly,” he said.

Scott Hennig of the Canadian Taxpayers Federation said the government continues profligate spending that exceeds targets which take into account inflation and population growth.

“They’re going in the wrong direction,” said Hennig. “Hoping for higher revenues is not a plan.”

The government is forecasting a budget deficit of $3.4 billion in the current fiscal year, with a return to budget surpluses by 2014.