EDMONTON – Alberta, once the envy of the country with its vast resource revenue and budget surpluses, predicted a $3.4 billion deficit, the province’s third deficit in as many years.
Alberta finance minister Lloyd Snelgrove said the deficit is a result of the government’s decision to go ahead with previous commitments to build hospitals, schools, roads and infrastructure programs.
“Albertans told us last year and the year before, they don’t want to go back into the pendulum days when we over spent and over cut,” Snelgrove said yesterday when he delivered the 2011-2012 budget.
“We could have made cuts that some critics were calling for, cuts that would have been damaging to core programs or infrastructure plans, but that would be short sighted. We didn’t panic during the darkest days of the recession and we’re not going to panic now,” said Snelgrove during a pre-budget news conference.
The government is not making any big spending cuts and is holding spending at $39 billion, a half percent increase over last year. The budget shortfall will come from money from the Sustainability Fund, drawing down the fund from $11 billion to $5.2 billion at the end of the fiscal year.
It’s the province’s third budget deficit in a row. Originally Alberta premier Stelmach planned to have Alberta back in the black by 2012, but that has now been pushed back to 2013.
Snelgrove said it’s only becoming apparent now how big an impact the economic downturn had on the Alberta economy, which is only just recovering.
Revenue is expected to increase $1.6 billion to $35.6 billion in 2011-12.
Agriculture remained unscathed with a budget of slightly less than $1 billion. Agriculture minister Jack Hayden said most of the agriculture budget is tied into long-term programs with the federal government or long-term provincial government programs.
The province did announce user fee increases, including fees for campsite reservations, vehicle registration, land title registrations and corporate registries.
