Al­berta’s busi­ness com­mu­nity slams NDP’s bud­get

The Intelligencer (Belleville) - - BUSINESS - GE­OF­FREY MOR­GAN

CAL­GARY — Al­berta Fi­nance Min­is­ter Joe Ceci got an ear­ful Mon­day from Al­berta’s busi­ness com­mu­nity about his gov­ern­ment’s $10.3-bil­lion bud­get deficit and rapidly ris­ing debt lev­els as he tried to al­lay con­cerns about the province’s fis­cal plan.

In a speech to a Cal­gary Cham­ber of Com­merce break­fast, Ceci de­fended the bud­get he tabled last week that showed Al­berta’s debt would rise to $71 bil­lion by 2019-20 with plans to re­turn to a bal­anced bud­get in 2023 by keep­ing spend­ing growth be­low the rate of in­fla­tion and pop­u­la­tion growth.

“A pri­or­ity for this gov­ern­ment is bring­ing down the deficit thought­fully over time,” Ceci said, adding he wouldn’t cut front-line pub­lic ser­vices to bal­ance the bud­get.

Adam Legge, Cal­gary Cham­ber of Com­merce pres­i­dent and CEO, called the bud­get “a dis­ap­point­ment,” us­ing his clos­ing re­marks after Ceci’s ad­dress to crit­i­cize the gov­ern­ment’s fis­cal plan­ning and said “2023 is too far off ” to bal­ance the bud­get.

“Our view is that hope should not be a strat­egy,” Legge said, adding the bud­get is “far too re­liant on re­source rev­enues as a driver of our for­tune and we have to get off that roller­coaster in Al­berta.”

Suc­ces­sive pro­vin­cial govern­ments in Al­berta have tried and failed to make the oil-and-gaspro­duc­ing province less de­pen­dent on en­ergy rev­enues, which drive a boom-and-bust cy­cle in the re­gion’s econ­omy and also in the province’s rev­enues.

Legge said last week’s pro­vin­cial bud­get doesn’t solve the prob­lem ei­ther and “doesn’t take enough of a step to­ward tack­ling the deficit. A bal­anced bud­get is a bet­ter part of a decade away.”

Univer­sity of Cal­gary pres­i­dent and vice-chan­cel­lor El­iz­a­beth Can­non said she ap­pre­ci­ated con­sis­tent, sta­ble fund­ing for her post­sec­ondary in­sti­tu­tion and that “it takes courage to ad­dress the busi­ness com­mu­nity after a tough bud­get.”

Busi­ness lead­ers, an­a­lysts and credit rat­ings agen­cies have widely crit­i­cized the pro­vin­cial gov­ern­ment’s plans.

CIBC Cap­i­tal Mar­kets an­a­lysts Maria Ber­let­tano and Andrew Gran­tham said in a re­search note the bud­get “will do lit­tle to sway the two U.S. rat­ings agen­cies to re­vise their neg­a­tive out­looks to sta­ble” and “the pos­si­bil­ity of a rat­ing down­grade re­mains.”

Last week, Moody’s In­vestor Ser­vice and DBRS Ltd. is­sued re­ports that crit­i­cized Al­berta’s deficit and spend­ing plans, say­ing the debt lev­els could strain the province’s cur­rent credit rat­ing. Both credit rat­ings agen­cies down­graded Al­berta’s debt after last year’s bud­get, mak­ing bor­row­ing more ex­pen­sive.

Ceci ad­dressed the credit rat­ing is­sue Mon­day, say­ing, “I un­der­stand and ap­pre­ci­ate the credit rat­ing (agen­cies’) con­cern.”

Al­berta’s debt-to-GDP ra­tio is pro­jected to jump from 10.6 per cent to 19.5 per cent over the next three years, but Ceci said he didn’t ex­pect the province’s debt ser­vic­ing costs would rise sub­stan­tially.

IAN KUCERAK/POST­MEDIA

Al­berta Fi­nance Min­is­ter Joe Ceci, left, along­side Pre­mier Rachel Not­ley, right, speaks as he ta­bles Bud­get 2017 in the Al­berta Leg­is­la­ture in Ed­mon­ton on March 16.

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