The province released its third quarter update on Tuesday and is forecasting a deficit for 2012/13 between $3.5 and $4 billion.
Finance Minister Doug Horner unveiled the results in Calgary and said resource revenue was $2.4 billion less that expected in the first nine months of the fiscal year.
The revenue reduction is being blamed on global uncertainty, declining bitumen prices, higher exchange rate and lower land lease sales.
“As a landlocked province with limited access to markets for our oil resources, Alberta is continuing to face serious challenges to our bottom line,” said Horner. “The upcoming provincial budget focuses on making the tough but thoughtful decisions necessary to allow the province to continue to deliver on its priorities. It will include an operating plan, a savings plan and a fully-funded capital plan that will ensure we meet the needs of today’s Albertans as well as a new generation of Albertans 20 years from now."
The government says they will lead by example and will freeze salaries of management for the next three years starting on April 1 which will save $54 million.
“Alberta is dealing with rapidly falling resource revenues and it means we’re making some tough decisions,” said Horner. “Our government is leading by example - with a slimmed down cabinet; an eight per cent MLA pay cut and a pay freeze for MLAs; today we're taking action on management salaries.”
The province says it has also found nearly $600 million in savings across ministries and that expenses for the first nine months was $280 million less than expected.
The Wildrose Party responded to the news saying that the $4 billion shortfall taken together with capital spending and debt really equals a deficit of $5.25 billion.
The opposition says the Sustainability Fund will be drained from $7.5 billion to $2.5 billion and leader Danielle Smith says Redford's pre-election budget was an overinflated election platform.
“This Premier promised the moon to Albertans before the election and now she’s crashing down to Earth,” Smith said. “Reality is setting in and Albertans are discovering that there’s simply no way for her to keep those promises. Albertans who voted for this Premier and this government based on her promises have every right to be upset today. They have been let down yet again.”
The 2013 budget will be delivered March 7.
2012-13 Third Quarter Actuals for the nine months ended December 31 ($ millions)
|
|
Budget 2012-13 |
Q3 Budget |
Q3 Actual |
|
Revenue
|
$40,263 $11,198 |
$28,827 $8,167 |
$28,064 $5,736 |
|
Expense |
$41,149 |
$30,324 |
$30,044 |
|
Surplus / (Deficit) |
($886) |
($1,497) |
($1,980) |
|
Sustainability Fund |
as of December 31, 2012 |
$3.4 billion |
