Chamber expert casts doubt on budget plan
Surplus unlikely until 2015
Premier Alison Redford said Tuesday she hasn’t changed her long-standing commitment to balance the provincial budget next year, blaming an “administrative error” for her message to party faithful this week that the Tory government would only get back in the black in 2014.
But while the premier said she’s sticking to her guns, the Calgary Chamber of Com- merce said that under current trends in spending and revenue, the Redford government will be unlikely to record a surplus until 2015.
“I don’t anticipate we’re going to be in a position to balance the budget — the actual budget — for probably another couple of years,” chamber chief economist Ben Brunnen said in an interview.
“What they’ve been traditionally banking on is an increase in revenues, largely as a result of resource revenues. I don’t expect 2013 is going to lead to a significant increase in resource royalties that would enable them to balance their books on a consolidated basis that year — or even in 2014.”
Since running as a candidate for the Progressive Conser- vative leadership last year, Redford has promised to end the current five-year run of deficits in 2013.
In an email to Tory supporters on Monday however, Redford said the need to keep spending on crucial capital projects meant the government was “working towards a balanced budget by the spring of 2014.”
“I can only say that was an administrative error on the part of the party,” Redford told reporters in Edmonton on Tuesday. “Our position hasn’t changed.”
The Tory government pro- jected an $886-million deficit in this year’s spring budget, but lower-than-expected oil and gas prices have caused the shortfall to balloon up to $3 billion.
It also projects a $952-million surplus for the budget year starting next April.
The province now intends to borrow and use other alternative finance measures, such as public-private partnerships, to finance major capital projects.
Redford repeated Tuesday the government’s recent message — that the 2013-14 financial blueprint will have a balanced operating budget, which encompasses program spending, a “fully-funded” capital budget and a savings plan.
“It definitely is a reframing of the issues,” Brunnen said. “At the end of the day, if your revenues are less than your expenditures, you’re running a deficit.”
The Wildrose Party has slammed the Tories for not balancing the books and finance critic Rob Anderson said the government is losing credibility with its mixed signals.
“These folks don’t know what they’re doing,” he said.
“It’s clear they’re not going to balance the budget next year. They may balance the operational side, but as everyone knows ... it’s been balanced since the ’90s. Ed Stelmach had a balanced operating budget the entire time he was premier. That’s nothing. It doesn’t mean anything.”