More jobs, lower deficit but effects of recession linger, Ceci says in update

EDMONTON After two years of fiscal updates that landed anywhere between sad and downright depressing, Alberta’s latest fiscal update forecasts lower unemployment, economic growth and a $1.4-billion drop in the deficit.

But the effects of the recession continue to linger, particularly around sluggish business investment.

Presenting third-quarter figures Wednesday, Finance Minister Joe Ceci acknowledged the province isn’t yet out of the hole and said Albertans can expect more “prudent choices” in the upcoming budget March 22.

“I’m not satisfied,” Ceci said, but he’s happier than he has been in a while.

Wednesday ’s update revises real GDP growth for the 2017-18 fiscal year up to 4.5 per cent — the highest it has been since 2014. It’s expected to continue its climb by 2.8 per cent in 2018.

Borrowing is expected to drop by around $3.6 billion, leading to $25 million less in debt-servicing costs.

More than 90,000 full-time jobs were created over the last year, pointing to a marked shift from part-time employment.

Still, the province continues to play catch-up. Some areas — Red Deer and Grande Prairie, for example — have yet to recover the jobs lost when the plunging price of oil threw Alberta’s finances off a cliff.

Calgary was the first region to recover the number of jobs it lost in the recession, according to employment data, but they weren’t necessarily in the same professions or positions.

The vast majority of the new jobs were in the private sector. About 34,000 were in goods production (think oil, gas and manufacturing ), with 12,000 added to the service economy including food, transportation and accommodation. Public sector employment — including federal, provincial and municipal — shrank by around 6,500.

Job growth has unemployment projected to fall to 6.8 per cent, from 7.6 per cent at budget. However, income tax revenues are around $388 million less than expected, as the books catch up with the full realization of just how bad 2016 really was.

Revenues are up, with the provincial coffers set to rake in close to $2 billion more than it expected thanks to higher resource revenues and investment income, and a $771-million improvement in Balancing Pool income.

On the flip side, expenses are $1 billion higher, largely due to income and disability supports, child and labour market programs, increased capital grants and disaster assistance.

United Conservative Party finance critic Drew Barnes slammed the government for spending a

good chunk of that additional revenue.

Barnes acknowledged Alberta’s economy is performing better, but worries investment is steering clear of the province.

As to how his party would deal with finances, Barnes said the UCP will not present an alternative budget come March 22, but promised something before the 2019 election.

The UCP won’t figure out its policies until May, he said, plus it doesn’t have “anywhere near” the information it would need.

That’s not stopping the Alberta Party or independent StrathmoreBrooks MLA Derek Fildebrandt, both of whom said Wednesday they will put forward alternative fiscal plans.

Alberta Party MLA Greg Clark criticized the government’s latest update, saying the NDP continues to put too much faith in oil revenues.

“Hope is not a strategy. We need a proper plan to get this province back on track fiscally,” he said.