Prentice promises tight controls on debt
CALGARY – Alberta Progressive Conservative leadership hopeful Jim Prentice said Friday he would continue the current government’s policy of taking on billions of dollars in debt to pay for roads, schools and hospitals.
But he also said he would impose strict rules to accelerate payback to keep the province from tumbling deep into an abyss of red ink.
If he were to become premier, half of future budget surpluses would go to debt repayment and the other half would go to savings, Prentice told reporters at a speech to the Calgary Chamber of Commerce.
“The current fiscal plan calls for Alberta’s existing debt to be repaid over 30 years,” he said.
“I believe that debt can be repaid over 15 years, perhaps 20. It will depend a bit on oil prices.”
Under former premier Alison Redford, the province began borrowing for infrastructure. This year, the debt will rise above $8 billion and is to reach $21 billion by 2017.
Redford, along with Finance Minister Doug Horner, defended the plan. They said hundreds of thousands of newcomers arriving each year need basic amenities.
Prentice agrees. He dismissed criticism from the Opposition Wildrose party and the Canadian Taxpayers Federation that such debt spending is irresponsible.
Albertans he has talked to want ring roads completed in Edmonton and Calgary, a twinned highway to Fort McMurray, schools, senior-care centres and health clinics, he said.
“It’s very clear that we have to get on with this. Our population has crested at over four million headed to five million people,” he said.
“It (the infrastructure) can be built out over a five-year period and could be paid out over a 15-year period, so let’s get on with it.
“That’s how all other democratic governments function.”
Prentice also said he won’t tinker with Alberta’s current tax regime to try to raise money.
The NDP and Liberals have said the 10 per cent flat tax favours the wealthy and they suggest a progressive tax would be fairer and raise more revenue.
Prentice said he wouldn’t alter the flat tax, wouldn’t institute a sales tax and wouldn’t bring back health-care premiums.
“We have a very strong taxation base in terms of personal income tax, also in terms of corporate tax and … in terms of the revenue stream we have from our non-renewable resources.
“That should be sufficient for us to live within our means.”
Prentice, a 57-year-old former Calgary MP and federal cabinet minister, is one of three candidates in the race to replace Redford, who resigned two months ago amid a scandal over wasteful, self-indulgent spending.
Advanced Education Minister Dave Hancock is serving as premier until a new leader is chosen by Tory party members in September.
Former Alberta cabinet ministers Ric McIver and Thomas Lukaszuk have also announced candidacies, but are still collecting the 500 signatures from party members needed to be accepted into the race.
McIver said Friday he is still formulating his policies on the budget based in part on what he’s hearing on doorsteps.
“I’ve heard several people say they’re OK with borrowing for capital, but what they (all) really want is they want the infrastructure to be built and they want the budget balanced. Those are fairly consistent messages,” he said.
Lukaszuk, who joined the race Thursday, said Albertans have told him they want a budget with a clear bottom line.
Under Redford, the province separated capital and operating spending in the budget, leading experts to disagree on the true size of the annual deficit.
Prentice is considered the front-runner, with all but a handful of Tory members of the legislature endorsing his bid.
The three candidates are to talk with party members Saturday at a policy forum in Edmonton.
The deadline for nominations is May 30.
— By Dean Bennett in Edmonton