Alberta Premier Jason Kenney says there will be spending restraint in the upcoming budget but it won’t resemble the fiscal bloodletting of the early 1990s.
“This does not have to be 1993. It will not be like 1993,” Kenney said to applause as he addressed leaders from across the province Friday at the annual meeting of the Alberta Urban Municipalities Association.
In the early 1990s, then-premier Ralph Klein slashed public spending by about 20 per cent and cut public-sector salaries as he dealt with high deficits caused by low oil prices.
Kenney told delegates that restraint is needed now, but front-line services in core areas such as health and education will be preserved.
“(The restraint) will be thoughtful, prudent, focused and limited.”
The United Conservative premier acknowledged that some municipal leaders might not like decisions in the Oct. 24 budget, but added they are necessary to put the brakes on public spending that, if left unchecked, will lead to spiralling debt loads and ultimately deeper spending cuts.
“We cannot continue to kick this problem down the road,” said Kenney.
“We cannot live forever off of our credit card. We cannot spend money that we do not have.”
Earlier Friday, Opposition NDP Leader Rachel Notley told delegates that they are being set up as fall guys.
Notley said Kenney will boost the bottom line of the provincial budget by offloading program and service costs onto municipalities, making local leaders pay up or take the heat from citizens.
“Capital funding and maintenance (for municipalities) is clearly on the chopping block,” said Notley.
“It’s an easy target because when potholes get deeper and wider and when the roof at the rec centre is leaking, they (the province) don’t have to take the angry phone calls and they don’t have to reconsider their mill rate. You do.
“The premier knows there is only one taxpayer, but he would prefer that that taxpayer be angry at a government that’s not his.”
Kenney has said the budget will lay the fiscal foundation for the next four years, guided by a recently released government-appointed panel’s report on provincial spending.
The report is urging the province to make sweeping changes to how programs are funded in big-ticket spending areas of health, education and public-sector salaries.
It says the province delivers $440 per capita to municipal capital grants, which is more than 20 per cent higher than the national average.
“The province can’t afford to maintain existing levels of municipal capital support — levels that far exceed those of other provinces — and drive up provincial debt, while municipalities have tax room and yet rely on increasing provincial grants,” says the report.
It says overall Alberta is a high public spender with average to below-average results, and that saving money through reorganized service delivery is the answer — not raising taxes.
The report also says the government must deal with public-sector salaries, which account for almost $27 billion a year — more than half the government’s operating budget.
Kenney has said the government is looking at job attrition to save money. He was asked Friday if it will also implement another report recommendation to unilaterally set salaries and compensation for public-sector workers, including doctors.
“We haven’t made final decisions,” he said.
“We don’t need to do what happened in 1993, but we will be asking our public-sector unions to work with us on bringing balance back to the province’s finances.”