Tories aim for balanced budget by 2013/14

Opposition parties were quick to take aim at the provincial Tories’ 2012 budget released last week.

The Wildrose party said that Premier Alison Redford’s budget relies on “pipedream projections of sky high revenues and a red hot economy to bail them out of a financial train wreck.

“This is an Alison in Wonderland budget,” said Danielle Smith, Wildrose leader. “Ms. Redford’s revenue projections are nothing short of fiction and given the world debt crisis, incredibly irresponsible.”

The budget forecasts revenues of $40.3 billion — an increase of $1.8 billion. Total expenses of $41.1 billion are also projected, marking an increase of $1.3 billion.

Ultimately, forecast economic growth is pegged at 3.8%.

Budget details also predict as the Alberta economy continues to strengthen, revenues are expected to exceed $40 billion for the first time in Alberta’s history in 2012-13. Revenue is forecast to reach $49 billion by 2014-15, mainly due to higher income tax revenue, strengthening bitumen royalties and higher federal transfers.

But the Wildrose party said the revenue projections are unrealistically high.

“Alison Redford is putting Alberta’s economic health on the edge of a knife relying on outrageously optimistic projections,” said Rob Anderson, Wildrose finance critic. “If oil were to dip to even $70 a barrel our provincial balance sheet would implode, our savings fund would completely evaporate, and we would be forced to take on unprecedented levels of debt.”

Budget 2012 also pledges to inject more than $2 billion into municipalities over 2012/13. There will also be an additional $400 per month for AISH clients, and over the next three years there will also be a $16.5 billion investment in public infrastructure.

Ron Liepert, the Progressive Conservatives’ finance minister, said the budget held no new taxes or tax rate increases. “With the Alberta economy gaining momentum and the province poised to return to surpluses, we are focused on the road ahead – investing in people and replenishing our savings, while maintaining the lowest overall tax structure in Canada,” he said.

“Managing Alberta’s finances is about more than just the bottom line, it’s about ensuring government is supporting the outcomes Albertans want for themselves and their families over the long-term.”

The budget also set forward three-year predictable funding for school boards, post-secondary institutions and municipalities to allow greater stability and improved planning, he said.

Enhanced funding and tax incentives will also support research efforts in key areas such as agriculture, energy and the environment.

Savings set aside in the Sustainability Fund will be used to offset an $886 million deficit in 2012-13. A balanced budget is forecast for the following fiscal year, with projected surpluses of nearly $1 billion in 2013-14 and $5.2 billion in 2014-15.

Liepert said that going forward, in consultation with Albertans, the government will examine its revenue sources and savings strategy to cut the province’s dependence on volatile resource revenues.