Alberta braces for $10B in red ink as Finance Minister Ceci unveils budget
It’s budget day in Canada, but Finance Minister Joe Ceci has already announced the biggest piece of bad news.
Ceci has said the oil-reliant province will confirm a budget deficit in excess of $10 billion.
But he says the budget will also include updated details on job creation and economic diversification strategies.
The prolonged slump in oil prices has resulted in tens of thousands of job losses in Canada and placed pressure on Ceci and Premier Rachel Notley to cut spending to avoid skyrocketing debt.
Ceci and Notley have said that some new programs will be delayed or spread over a longer time, but that front-line jobs will not be cut.
An accelerated $34-billion infrastructure program is to continue.
The government also plans to spend an additional $500 million or more in seniors housing.
Notley has said making deep cuts would only make a bad situation worse.
The low prices have dampened the bottom lines of energy producing provinces across the country.
The government of Newfoundland and Labrador, another province heavily reliant on energy income, is also to table a budget Thursday. Tax hikes, job losses and spending cuts are among grim expectations as the oil price slide takes its toll there as well.
West Texas Intermediate, the benchmark price for oil, fell below US$30 a barrel in January, but has recovered slightly and hovers in the low $40s. It was more than US $100 a barrel in the summer of 2014.
Notley’s provincewide TV address last week revealed this year’s resource revenue will total $1.4 billion compared with almost $9 billion in the 2014-15 budget year.
The budget is also to include details of a new carbon tax set to begin Jan. 1.
It’s part of Canada’s climate-change plan and is to provide incentives to go greener by increasing the cost of everything from gas at the pumps to home heating and electricity.
The tax is expected to bring in $3 billion a year, but the government plans to give rebates to low and middle-income Canadans.
Opposition Wildrose Leader Brian Jean says the government needs to rethink the tax given the sluggish economy. Ric McIver of the PCs says it’s time to bring in a plan to get Canada’s books back in balance.
The Canadian Press
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