Alberta is heading towards a $1.4-billion deficit at the end of the fiscal year, say figures from the government’s third-quarterly fiscal update — but that won’t mean shelving its highly lauded $2-billion plan for carbon capturing.
Finance Minister Iris Evans says setting aside money for carbon capturing is a “symbol to the world” that the province is addressing concerns over the oilsands, even in tough economic times.
“Carbon capturing is a symbol that’s alive and well and those are dollars that aren’t being spent today,” said Evans.
Figures from the update also show a $3-billion shortfall from what Alberta’s finance department predicted in April when it forecasted a $1.6-billion surplus.
Revenues for the province are expected to be roughly $38.7 billion, while expenses are expected to be at $37.1 billion — leaving Alberta with a $1.6-billion surplus.
But investments that the province made — including its Alberta Heritage Savings Fund — took a $3-billion hit, leaving the province with a “technical” $1.4-billion deficit, Evans said.
And that loss doesn’t include a health-care deficit that could be in the hundreds of millions of dollars, said Evans.
“Will we have a deficit next year? Yes,” said Evans, who promised there would be no double-digit increases in spending to next year’s budget, which will be released April 7.
“We are going to watch our spending and that means tightening our belts. Every minister has heard that loud and clear,” she said.
Dave Taylor, a finance critic with the Alberta Liberals, says the update makes Alberta “right on the edge, right now.”
“Running deficits didn’t work for Don Getty in the ’80s, it certainly won’t work in the 2010s,” said Scott Hennig, an Alberta director with the Canadian Taxpayers Federation.
“I can’t even fathom a year ago that we would be talking about deficits in Alberta. That just blows my mind.”