2010-11 deficit could reach $6.8 billion

EDMONTON: In its 2010-11 pre-budget submission to the Alberta government, the Canadian Taxpayers Federation (CTF) is calling on the provincial government to take serious action now rather than dither and promise balanced budgets in the future.

CTF-Alberta director Scott Hennig will be presenting the report to the government this afternoon during a meeting with new Finance Minister Ted Morton. The report, entitled “Blueprint for a Balanced Budget,” details cuts the Alberta government should make immediately to balance the budget as well as long-term strategies to avoid deficits in the future.

“Throughout Don Getty’s reign as premier the government made a string of promises to balance the budget in the next three to five years. Yet, they never were able to run a balanced budget,” said Hennig.

“We’ve run the numbers and it’s clear to us that unless oil and gas prices rocket up, the government could run between a $4 billion and $6.8 billion deficit next year,” continued Hennig. “They can follow the Getty plan and simply promise balanced budgets in the future or follow the Klein plan and actually balance the budget."

Blueprint for a Balanced Budget examines whether Alberta has a spending problem or a revenue problem and determines that it is unquestionably a spending problem that is plaguing the province.

Had the government limited their growth in spending to the inflation and population growth rate starting in 2005, they would be running a $3.4 billion surplus in 2009-10 and would be able to increase spending in Budget 2010 by 2.64 per cent, rather than look at cuts.

Further, based on projections for this year and next year’s deficit, the CTF expects the Sustainability Fund could be nearly empty by the end of this upcoming fiscal year.

“The Sustainability Fund might seem large, but when you consider this year’s deficit, next year’s deficit and the borrowing the government has done against the fund, there’s very little leftover after this next year,” said Hennig.

The CTF makes 23 recommendations in this year’s pre-budget submission, including cuts that amount to $6.4 billion in annual savings and $4 billion in one-time savings.

Some recommendations include:

• A 5 per cent across-the-board cut;
• Extending the three year Capital Plan over five years;
• A 5 per cent reduction in bureaucrat pay;
• Cancelling the carbon capture and Green TRIP programs;
• Reversing the MLA pay hike and eliminating MLA severance payments;
• Eliminating the Alberta Film Development Program;
• Eliminating the venture capital fund;
• Stop borrowing money through the issuing of provincial bonds;
• And more…

Copies of “Blueprint for a Balanced Budget” can be found on-line at: /media/downloadable/Blueprint%20for%20a%20Balanced%20Budget%20(WEB).pdf or by contacting the Alberta office at 1-800-661-0187.