It is not surprising last week’s provincial budget wasn’t too hard for Albertans to swallow.
With an election right around the corner and the Wildrose Party putting up a fight to break into a previously impenetrable realm, the PCs have every reason to put out a good news budget.
However, it isn’t this year’s budget and its nearly $886 million deficit that Albertans should be wary of. The predictions and unanswered questions that come with the budget are rightly raising concerns among opposition parties and Albertans alike.
For example, the PCs are expecting a $9 billion increase in revenues, largely from oil, over the next two years. That increase would help propel the government into a $5.2 billion surplus in 2014, they say.
The windfall would come from higher oil and gas royalty revenues. While the budget doesn’t include any tax increases, the Province is expecting higher revenues from income and corporate taxes from an anticipated economic turn around.
It’s true Alberta is in better economic shape than much of the rest of Canada, but the global economy is still on shaky ground with continued uncertainty in Europe and the U.S.
In the meantime, the Tories didn’t shut the tax door though, saying they will be reviewing Alberta’s tax system.
So far the government has been vague about what the review will encompass. Could the province be looking at a sales tax? Is a tax hike on the horizon? The current 10 per cent flat tax rate was brought in 2001 and actually decreased revenues by $1.1 billion.
What is on the table and what is off has not been made clear and likely won’t be until the election dust has settled.
With five years of deficit budgets and the Province’s rainy day savings fund whittled down to $2.4 billion after all is said and done in this budget there is little wiggle room left.
If the crystal ball is wrong in coming years future Alberta governments may be facing what many provinces and countries already know all about – increased taxes and deep cuts.
Those who say the Progressive Conservative government is gambling may be right, the Tories could very well be gambling on their own future. If this is a so-called ‘election budget’ it will be Albertans who decide which way to bet on the PC’s gamble.
