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Economy

Alberta’s current fiscal policy ‘not sustainable’ in the long term: report

WATCH ABOVE: A new report is warning that Alberta will "pile on debt" for decades unless the government takes serious action. Tom Vernon reports.

A new report says Alberta will pile on debt for decades to come unless the government takes serious action.

The Parliamentary Budget Office says Alberta’s fiscal gap stands at $14 billion per year and major changes need to happen to get back on solid footing. (Scroll down to read full report).

In order to close that gap, the PBO says the province would have to hike taxes by 25 per cent, or cut program spending by 20 per cent.

READ MORE: Alberta NDP tables fingers-crossed budget, projects $10.3-billion deficit

Premier Rachel Notley isn’t buying it.

“To pick one point in time and then make projections 30 or 50 years out, it’s an interesting academic exercise, it really has no value in terms of projections,” she said Friday.

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She said this isn’t a fair assessment and the report doesn’t take into account volatile resource revenues. The government’s current strategy was never the long-term vision, she said. Now that the economy is growing again, she’s confident the province will be back to balance by 2024.

“I’m quite confident we’ll be able to do that,” she said.

“Careful, thoughtful, strategic, while at the same time supporting Alberta families and Alberta businesses during one of the most difficult times the province has ever felt.”

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READ MORE: Alberta NDP sees positive signs after 2 painful years since oil prices collapsed

The opposition says the premier needs to be taking this report much more seriously, calling it a clear indictment of Alberta’s fiscal plan.

“There’s $14.1-billion difference between what the NDP’s doing and what’s sustainable,” United Conservative Party MLA Ric McIver said.

“I can’t imagine that it could get a lot worse than that.”

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READ MORE: Alberta economy rebounding, but deficit will remain: Conference Board of Canada

Alberta’s books aren’t the only ones the report found to be unsustainable. British Columbia and Saskatchewan would also have to increase taxes or cut spending, but by a far less amount.

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Newfoundland is on equal footing with Alberta.

Alberta’s current budget deficit stands at nearly $11 billion.