Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Finance Minister Travis Toews speaks about the upcoming budget, in Edmonton on Feb. 26, 2020.

JASON FRANSON/The Canadian Press

The Alberta government will release a budget on Thursday that will reveal the ruin left by the COVID-19 pandemic and an oil price crash a year ago as the province lays out a plan to piece its finances back together.

The United Conservative Party government has already given up on a promise to balance the budget before the next election in 2023, though Thursday’s fiscal plan is expected to continue to push policies designed to trim costs and stoke economic growth. As well, it will focus on navigating the rest of the public-health crisis. The province is ramping up its vaccine plans amid fears of a coming third wave.

The province has also been facing increasing pressure to stabilize its finances by reducing its reliance on volatile oil prices, with economists and even groups such as the Business Council of Alberta recently urging the government to consider a sales tax to fill that gap. Premier Jason Kenney has rejected the idea and said this week’s budget won’t contain measures to bring in significant sources of new revenue.

Story continues below advertisement

Finance Minister Travis Toews said it’s not possible to provide a path to a balanced budget.

“We will need additional economic clarity before we can deliver that to Albertans, in terms of timing and method,” Mr. Toews said in an interview.

“Right now, the No. 1 priority is ensuring that we’re resourcing health adequately to deal with the pandemic challenge, and this budget will reflect that. The second priority … is economic recovery and growth.”

Recent increases in oil prices will improve the province’s outlook, though Mr. Toews said the government’s projections for the industry are conservative.

Alberta was already in rough shape in early 2020, more than five years after oil prices collapsed and sent the province’s economy into a downturn. Tens of thousands of Albertans had lost their jobs and the government ran up years of deficits in a province that once prided itself for paying off its debt in full.

The Alberta government tabled a budget last February that projected increases in oil revenues and a balanced budget in two years.

But before that budget could pass, oil prices crashed anew due to a price war between Saudi Arabia and Russia, and then the COVID-19 pandemic shut down much of the world’s economy. A projected $7-billion deficit for 2020-21 later ballooned to more than $21-billion and the idea of a balanced budget in two years vanished.

Story continues below advertisement

Mr. Toews said the province has made progress bringing Alberta’s per-capita spending down, closer to places such as Ontario and Quebec, and this week’s budget will include additional measures. The government has already announced job cuts affecting thousands of workers and has identified public-sector wages as an area for further reductions.

The budget won’t look at new revenue sources, though the government intends to strike a panel near the end of its first term to look at its tax structure.

Mr. Toews argued that it would be too damaging to impose new taxes in the middle of a downturn and he noted that any new taxes would require a referendum.

“There will come a time when it will be important to take a hard look at the efficiency and appropriateness of Alberta’s revenue and tax structure,” he said. “Right now, I think it’s premature.”

The Business Council of Alberta argues that now is precisely the time to at least start talking about taxes after the pandemic laid bare just how exposed the province’s economy is to resource prices. While Albertans have become accustomed to booms and busts, many experts have warned that there is little chance of the province returning to the riches that came when oil was above US$100 per barrel.

The council released a report last week that said the province should consider implementing a harmonized sales tax to provide a stable and predictable source of income. The province could add billions in new revenue while still having the lowest consumer tax in the country, the council argued.

Story continues below advertisement

The report estimated that to balance the budget, the province would need to either increase taxes by more than a third or cut spending by 27 per cent. The council’s president, Adam Legge, said the province needs to find a less extreme solution in the middle, though he said such a change would need to wait until after the pandemic.

“We can get only so far through economic growth and tweaking our expenses,” Mr. Legge said in an interview. “What we really need to do is have a revenue model that is stable, certain, equitable, competitive and transparent.”

The Opposition NDP have called for the government to use Thursday’s budget to reverse previous cuts and double down on health care and economic diversification.

NDP Leader Rachel Notley said the UCP government has been aimless when it comes to managing the economy and she said there were signs even before the pandemic that its policies were not working.

“We’re coming out of what has been one of the biggest economic challenges faced by Alberta and all parts of Canada in many, many years, and we need a government that is going to move forward in a way that focuses on diversification, on sustainable job creation, and on a recovery.”

She also condemned the government’s focus on cuts, arguing that it doesn’t make sense to compare Alberta’s spending with much larger provinces such as Ontario and Quebec, whose large populations provide economies of scale. And lower spending in places like B.C., she said, has meant higher rates of poverty and fewer supports for vulnerable people.

Story continues below advertisement

Ms. Notley agreed with the government that it would be a bad time to impose a sales tax but also said the province should eventually look at reforming its tax structure – starting by reversing corporate tax cuts that were accelerated last year.

We have a weekly Western Canada newsletter written by our B.C. and Alberta bureau chiefs, providing a comprehensive package of the news you need to know about the region and its place in the issues facing Canada. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies