EDMONTON – Alberta Premier Rachel Notley is shutting down suggestions her spend-heavy budget may ultimately trigger a sales tax to pay for it all.
Notley told the house during question period Wednesday that no sales tax or harmonized tax will be created on her watch.
“That budget nor any other budget in the term of this government will not and does not include a PST,” said Notley.
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The budget presented by Finance Minister Joe Ceci uses low interest rates and a downturn in the economy to ramp up construction and refurbishment of roads, schools and hospitals.
It projects $34 billion in capital spending over the next five years and $47 billion in total debt by 2020.
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The government intends to keep hiring to a minimum, but doesn’t plan to drastically reduce staffing levels in key areas such as health and education.
The result is a budget that forecasts multibillion-dollar deficits for the next four years, including $6.1 billion in the current fiscal year, which ends March 31.
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Wildrose Leader Brian Jean told Notley the borrowing could trigger a cut in the province’s AAA credit rating, leading to higher interest rates and even more red ink.
“This budget has too much debt and no plan to pay it back,” Jean told the house. “Why is the premier risking the future well-being of Albertans with this budget?”
Notley noted the government will pass a bill this session to head off downgrades by limiting debt to 15 per cent of the province’s nominal gross domestic product. She said the current ratio is about six per cent of GDP.
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She said her job is to find the best long-term plan and stick with it rather than simply hacking and slashing when prices fall in Alberta’s wellspring oil economy.
“This budget is investing in the future well-being of Albertans,” said Notley.
“The drop in the price of a barrel of oil should not be something that every teacher looks at every morning to find out if they have a job that day.”
Jean and other opposition leaders have criticized Notley for borrowing not just for capital projects but also, starting next year, to pay for day-to-day programs and salaries.
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Notley, who was in Calgary Wednesday morning to announce the province will go ahead with a new cancer-care centre there, told reporters that not doing so would require deep and devastating cuts in public services.
“The only way that any government could plan to not have to borrow for operations for a couple of years would have been to make absolutely unprecedented cuts to our teachers, to our nurses, to our hospitals, to the very services that promote the resilience of our communities,” she said.
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The government anticipates borrowing $712 million next year to pay for operating expenses and $3.1 billion the year after that.
Alberta has not borrowed to pay the everyday bills in two decades.
In recent years, Progressive Conservative governments drew down on the province’s multibillion-dollar contingency fund to cover off deficits. That will no longer be an option come next year as the government plans to use up the money left in the fund.
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