By George Brown
Alberta plans to come out of the global economic recession the same way it when in last fall — as Canada’s economic leader.
Premier Ed Stelmach met with publishers and editors at the Alberta Weekly Newspapers Association (AWNA) at their recent annual convention in Edmonton to discuss the province’s future behind the wheel of Canada’s economy.
“The recession may or may not be coming to and end — depending on who you listen to,” Stelmach said.
But he confirmed Alberta still expects to run a $6.9 billion deficit for the current fiscal year.
“For a lot of Albertans, it’s scary news. Many may think we’re going down a road we’ve already travelled and didn’t particularly enjoy the trip the first time.”
Canada’s gross domestic product is up 0.1 per cent — a small amount to be sure but it’s “better than going the other way,” Stelmach said. Before the recession, Canada enjoyed 44 consecutive quarters of economic growth.
While Alberta will wrestle with spending cuts and policies to bring the deficit under control, Stelmach said economists predict “growth will be quicker and it will be stronger in Alberta than in most other places.”
He warned that even if the economy turns around quickly, it could still be three years before government coffers are in the black. It takes that long for industry to see a profit from new business, for them to be taxed on their profits and for the government to collect that tax.
But the government is not planning to levy any new taxes nor increase current personal or businesses taxes.
“You can’t tax yourself out of recession,” he said.
“It’s easy to hold the line on taxes when the economy is humming along, it’s harder but even more important to do during times like now when the economy is struggling.
“This is not like the last time,” the premier said. “We’re in a completely different position. We’re better positioned than anybody else in Canada and quite frankly, anybody else in North America.
The premier said although Alberta has the “most volatile revenue stream of any jurisdiction in North America,” his government was prepared for the worst by creating the $17 billion sustainability fund. “It’s a very liquid fund; it’s in the bank.”
That fund will be used to allow the government to continue spending on necessary infrastructure and “cushion the blow” of cuts to education and health programs.
“We will tackle the recession and deal with the deficit. That’s why our economic plan includes investment in infrastructure even while we tighten our belts.”
Stelmach said Alberta is better off than other provinces because the government doesn’t have to borrow money to balance its books. British Columbia is looking at a $3-billion deficit this year but it has a $30-billion debt. Alberta has a deficit twice as big and no debt, and won’t have to go in debt to make up the shortfall.
“We don’t have to go to the bank and borrow money. The money’s there.”
Stelmach met Sept. 11 with the premiers of British Columbia and Saskatchewan to develop a Western Economic Partnership. This agreement would see the three provinces working as one economic unit to strengthen internal trade, innovation and international marketing by breaking down inter-provincial trade barriers.
“Nobody’s going to carry this country out of this recession…(other) than Western Canada.”
He said the West’s potash, oil, natural gas and timber resources, as well as tourism and agriculture, will lead the region out of recession and into a sustained period of new economic growth.
The premiers also signed a memorandum of understanding on carbon capture and storage that will see the provinces co-operate on energy research. Stelmach is concerned a federal election and a change of government would change federal policy on climate change initiatives.
“We’re not going to be pushed off course by challenging times,” Stelmach said. “Instead, we’ll strive to give all Albertans confidence and stability from their government, making the best decisions for our province’s future.”