WATCH ABOVE: The opposition is blasting Premier Jim Prentice’s announcement that Albertans will face a new health-care levy. Jessica Kent has more on Prentice’s pre-budget speech.
EDMONTON — On Tuesday evening, Alberta Premier Jim Prentice took to the airwaves to address Albertans ahead of the provincial budget.
In the 16-minute pre-recorded speech, the premier spoke about the current fiscal challenge – and Thursday’s budget – as well as a longer, 10-year budget plan. (You can watch the full address or read the text below).
“We are at a turning point in our province, and in the coming days, we will be announcing some critical changes to how we manage the finances of our province,” said Prentice.
He opened by reiterating oil prices have dropped by more than 50 per cent in a few months, which translate to a revenue shortfall over $7 billion.
So, what are the highlights from this address?
Examining public services
Prentice said, compared to the Canadian average, Alberta spends about $1,300 more per capita on programs and services. More than half of those costs, he said, are from salaries alone.
“We will honour contracts for our employees,” said the premier. “But as contracts expire, we need to seriously examine how we structure those contracts.
“The problem isn’t always salary-based, sometimes it’s how jobs are managed.”
Relying less on energy revenue
“Beginning in 2018-2019, the percentage of energy revenues going to program spending will decrease to 75 per cent,” said Prentice.
Within five years, the premier said just 50 per cent of energy revenues would be used for program spending while 25 per cent will go towards debt repayment and the emergency fund.
He also spoke about diversifying the economy through the Heritage Fund.
“I am determined that we will restore the Heritage Fund as a priority for Alberta,” he said.
Reintroducing health premiums?
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While he didn’t name them outright, Prentice hinted at a return of health premiums in his address.
“When we present our new budget, we will be asking Albertans to begin to contribute directly to the costs of the health system,” he said.
“This revenue will start small but it will grow over three years.”
No Provincial Sales Tax
Health premiums are just one of several options the province floated as it looked for ways to fill the $7-billion shortfall. Another option: taxes.
However, the premier made it quite clear there will be no PST in Alberta.
“I have an important assurance to make to Albertans: we will retain the most competitive tax system in Canada.
“Stated simply, we will not have a sales tax and we will still have the lowest taxes in Canada. And we will also ease the burden on working families,” said Prentice.
Balancing the budget
The premier hopes to have a balanced budget by 2017.
Budget 2015 will be revealed on Thursday.
WATCH: Provincial Affairs Reporter Tom Vernon looked through the premier’s address and tells us what we need to know.
Political reaction
In a media availability shortly after 7 p.m., Wildrose Leader Heather Forsyth said she was grateful for the opportunity to respond to the premier’s address and speak to Albertans “free of charge.” She called the speech “an election $100,000 address.” She said many Albertans likely watched the premier’s address and left with more questions than answers.
“You cannot tax yourself out of debt,” said Forsyth, when asked about the suggestion of health care premiums.
“Let’s be honest – it’s a tax. It’s a tax on Albertans. It’s a tax on Albertans when the economy is suffering.”
“The premiums that we have seen previously did not improve health care and I don’t expect the premiums that we will see now will improve health care,” added Forsyth.
An address by Liberal Leader David Swann followed the premier’s speech. Swann emphasized the need for an effective opposition, outlined successes by the Liberals, and expressed thanks for the opportunity to speak to Albertans in such “an important fiscal, social and political time” in the province. He also outlined the party’s priorities. Click here to read his statement.
“Today Mr. Prentice admitted to Albertans that PC governments have failed,” said NDP Leader Rachel Notley, “failed to budget properly and failed to protect public services.
“But Mr. Prentice didn’t announce plans to fix these problems. Instead, he announced that they would continue to stand by while the health care crisis gets worse.
“On top of that, at a time when Albertans are worried about their jobs, Jim Prentice wants them to pay an extra tax out of their own pocket for health care.”
Notley called the proposal nothing more than a “waiting room tax.”
WATCH: In an address two days before the budget, Alberta’s premier discussed the province’s fiscal plans. Here’s the full video.
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