‘Lot of letters’: Alberta finance minister talks budget, EV tax
$200 levy to be put toward road maintenance
Alberta Finance Minister Nate Horner unveiled his first budget on Thursday. Alberta projects a thin surplus of $367 million, as declining oil revenues from sluggish oil prices left the government with less to spend than it might have hoped. The provincial government says its plan aims to balance saving for the future — with $2 billion going into the Heritage Savings Trust Fund — and ensuring public spending is sustainable.
Horner spoke to National Post Thursday afternoon. This conversation has been edited and condensed for clarity and length.
Q What do you like about this budget? What are you happy with?
A When I think of this budget, I think it really kind of strikes the right balance.
We’re making some key investments, we’ve obviously prioritized health and education. We’re still using the fiscal framework to our advantage in those good years, like ’23 to ’24, which allows us to pay down more debt and make this historic deposit in Alberta Heritage Savings Trust Fund. So we’re doing a lot of things all at once, just like a household would, but all in a way that looks to the future.
Q The budget is based on oil selling at US$74 a barrel. Is that projection optimistic? Cautious? Not cautious enough?
A It’s definitely not less cautious, I’d say. That’s been a theme out of my office since I got the job, is that we want to be more cautious. I think the budget shows all of the forecasts the government uses, so we have lots of industry forecasts and all of the major banks and you’ll find that our forecasts are below the average in every year. Our forecasters do want to be accurate — this is our forecast, I can’t tell them ‘let’s put it at $65.’ It is a real forecast.
Q Tell me about the 25 per cent discount for seniors.
A We do have some seniors that are definitely experiencing some major challenges. Something that I would have liked to do with that was income-test it. But sometimes, through the implementation, that’s more costly than not. It was decided to give it to all seniors. It’s a 25 per cent discount on their driver’s medicals and other registry services. So, I believe it was the driver’s medicals that really inspired this, especially as they get a certain age and they need them annually.
Q You’ve introduced a $200 electric vehicle tax that should bring in $8 million annually by 2026–27. Are you expecting that much growth in electric cars?
A This was brought up to me in early days when we were discussing the fuel tax. I can tell you, I’ve had a lot of letters to my office, clearly saying that this is a fairness issue, and everyone contributes to the maintenance of the roads.
So, we think it’s extremely defensible and had no issues bringing that in and, if Trudeau says they’re not going to sell gas-powered vehicles by 2035, I guess we better get on with it.
Q What did you not get into the budget that you might have wanted to otherwise?
A As much as we increased the capital plan, there was a ton of great capital projects that I would have loved to see approved. It’s just a challenge.
We are looking at the bottom line and wanting to ensure that we had a surplus and more ballast. So, probably on the capital side, I would have been fine with doing even more.
Q This was your first budget. What was the process like?
A It’s been a bit of a grind, like we started in earnest in November. And it’s quite a process. It takes most of December and January. And then a lot of circling back on different issues and you want to make sure that you’ve covered all the most pressing needs. The more one ministry needs, it has to come from somewhere.
Q The income tax cut has been deferred. How committed are you to actually cutting income taxes for Albertans?
A Very. We’re going to continue to work behind the scenes to ensure that the capacity is there to do it.
I would go as far to say, this isn’t in question — we’re doing this.
But I can’t see the future. If oil went negative on us again, and we’re looking down the barrel of a $25-billion deficit, that’s a decision the premier and cabinet would have to make, but definitely we more than intend to make this happen.
And we have the upcoming years to try to create that capacity. As much as we’ve done to curb spending, I think there’s more work that can be done and I know I had a conversation with the premier today: We’re going to make sure the room is there to do it.