Debt criticized | While Alberta’s 2014 budget projects a surplus, opposition parties say it fails to consider billions spent on infrastructure
EDMONTON — The Alberta government has a “fully balanced budget” for the first time in seven years, thanks to booming oil revenue and strong taxes, says Alberta’s finance minister.
“It’s been a long road to get here,” Doug Horner told a news conference to explain the 2014 budget.
Alberta is expected to have an operating budget surplus of $2.6 billion and savings of $24 billion, but critics say Horner is leaving out billions of dollars that the province has borrowed for infrastructure projects in its budget accounting.
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Horner’s balanced budget doesn’t include the $5.1 billion that the government will borrow to fund capital projects such as roads, hospital and universities, which would bring the debt to $14.5 billion. The government changed the way it records its budget last year, dividing operating, savings and infrastructure.
“If you don’t invest in the infrastructure, then you stymie the growth in the economy,” he said.
The government plans to spend $19.2 billion in capital spending for infrastructure over the next three years.
“This is the right financial plan for the current situation, with low interest rates, close to 50 year lows we are seeing today,” said Horner.
Alberta’s economy still relies heavily on oil and gas, but more than half its $44 billion in revenue comes from income tax revenue.
“There is no question things are looking good in Alberta today,” said Horner.
Alberta Wildrose leader Danielle Smith said the government had an opportunity to stay out of debt and balance the budget.
“It would have been so easy to balance the budget and stay out of debt. Instead, they are going to be burying us in an avalanche of debt,” said Smith.
“They’re taking out $5 billion in this year alone and claim they have a surplus. Any claim this is a surplus budget is absolutely bogus.”
Liberal leader Raj Sherman said the government had no need to go into debt to pay for infrastructure projects.
“How is it possible in such a wealthy place we are going into debt and we are cutting public services? This is not how you build great provinces.”
Bob Barss, president of the Alberta Association of Municipal Districts and Counties, said he didn’t believe borrowing for infrastructure projects was a bad move.
“We borrow every day of our lives. Our whole (farm) business runs on borrowing. We understand borrowing. I don’t think there is going to be a lot of kick back on the borrowing for capital projects. We got to get this stuff done. We’re building it for 50 years. It doesn’t hurt to pay for it over 10 or 15.”
