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Neighbourly advice from one premier with a surplus to another with an unprecedented deficit

Watch: B.C. Premier Christy Clark offers some neighborly advice to Alberta Premier Jim Prentice.

Though they lie side by side, the economic situations in Alberta and British Columbia couldn’t be further apart.

Alberta Premier Jim Prentice has been very vocal about the challenges facing the province, saying it’s looking at a $7-billion shortfall, details of which will be revealed on March 26, in the provincial budget.

Next door, B.C. is running a healthy surplus —almost $900 million.

It’s difficult, B.C. Premier Christy Clark acknowledged, but her advice for her neighbour is to control government costs, with an eye focused on controlling wage settlements.

“That’s something that I know he’s grappling with; controlling government spending, investing in diversifying the economy so you’re not dependent on one resource, and then investing in diversifying your markets so you’re not dependent on the United States for your customers,” Clark said in an interview on The West Block with Tom Clark.

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READ MORE: Premier Prentice, accused of insulting Albertans, sticks to tough-love message

Doing so, however, can lead to icy relations between labour unions and government — as Clark recently experienced during negotiations with the teachers’ union.

Ultimately, though, public servants will understand the role they can play in helping keep the provincial books as strong as possible, Clark said.

Prentice, meanwhile, said his province’s economy is more diversified than some may realize. Still, the heavy reliance on oil royalties has hit hard as oil prices plummeted, he admitted.

READ MORE: Premier’s comments spark witty #PrenticeBlamesAlbertans jabs

What’s left for Prentice is finding an answer to one big question: how will he increase revenues in light of tanking oil prices?

“We have three levers,” Prentice said in an interview.

WATCH: Alberta Premier Jim Prentice discusses his province’s tough financial times, just weeks before delivering what will likely be a radical budget.

Those are: the province’s tax regime (the lowest in the country, by a mile), the roughly $5 billion contingency fund and government services.

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“We cannot have the most expensive services in the country, higher than the national average on every single front,” he said.

READ MORE: Premier Clark intervenes after union files lawsuit

“I’m not in a position today to tell you exactly how we’re going to strike the balance, but on every front, whether you talk about gasoline taxes, personal income taxes, the absence of a sales tax, no health care premiums, whatever it is, Albertans have had it really very good and they know that.”

Looking to their neighbours, Prentice said his task force is heading to B.C. to look at the centralized bargaining model used there.

As for adding a sales tax, it sounds like that is all but off the table.

“Albertans are pretty clear they don’t want a sales tax,” Prentice said. “I can’t tell you it’s universal, but it’s pretty overwhelming. It’s an aspect of the Alberta advantage that people value, pretty much overwhelmingly across the province.”

 

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