Alberta Finance Minister Travis Toews speaks about the upcoming budget in Edmonton on Wednesday, Feb. 26, 2020. Toews says the goal in 2021 is to get vaccines out and put the COVID-19 pandemic in the rear-view mirror, thenwork to fix Alberta’s battered economy. THE CANADIAN PRESS/Jason Franson

Alberta Finance Minister Travis Toews speaks about the upcoming budget in Edmonton on Wednesday, Feb. 26, 2020. Toews says the goal in 2021 is to get vaccines out and put the COVID-19 pandemic in the rear-view mirror, thenwork to fix Alberta’s battered economy. THE CANADIAN PRESS/Jason Franson

2021: Alberta eyes post-COVID economic rebound but faces big budget questions

Toews said the plan is to get Alberta out of the financial ditch in February with the budget

Alberta Finance Minister Travis Toews says the goal in 2021 is to get vaccines out and put the COVID-19 pandemic in the rear-view mirror, then work to fix a battered and beleaguered economy.

But with a $21-billion deficit and Alberta’s wellspring oil and gas economy still in flux, there’s a red-inked elephant in the room: Where’s the money going to come from?

“We will not cut our way out of a $21-billion deficit,” Toews said in a year-end interview with The Canadian Press.

“We have to get the economy growing again. And economic recovery will very quickly become job No. 1 as we start to get past the pandemic.”

Roll the tape back to the start of 2020. Premier Jason Kenney’s United Conservative government was busy trying to resuscitate an already wheezing economy only to see COVID-19 blow everything apart and take with it Kenney’s signature election promise to balance the deficit in his first term.

That goal is a distant memory with a projected budget deficit this year tripling an original forecast of $6.8 billion. COVID-19 has slashed demand for energy, shuttered businesses and demanded relief aid and job supports to keep people going.

Toews said the plan is to get Alberta out of the financial ditch in February with the budget.

In November, he laid out “fiscal anchors” for the journey: keeping the net-debt to GDP ratio under 30 per cent, reducing public sector spending to match comparable jurisdictions and setting a timeline to get the budget back to balance.

University of Calgary economist Trevor Tombe said Alberta is in the enviable position of having options. It’s the lowest-taxed province, and oil and gas will continue to deliver billions of dollars to the treasury for the foreseeable future, though not in the same eye-popping amounts as boom times.

“But even if (the energy revenue) is significant, it won’t be nearly enough, so we need to shift gears on how we fund public services.”

By his number crunching, Tombe said if Toews is to meet his targets, Alberta will need to find an extra $7 billion a year if it wants to get the budget out of the red and start paying off a debt now projected to reach $97 billion in 2021.

Such talk raises again the spectre of a sales tax.

Alberta’s Social Credit government brought in a two per cent levy in 1936 and quietly dropped it a year later. After the Second World War, Alberta’s oil and gas economy exploded, allowing it to eschew the stability of a tax.

Sales tax is the third rail of Alberta politics and by law can’t be brought in without a referendum. Toews said it’s not in the cards, but he’ll strike a panel to revisit Alberta’s revenue generation.

Opposition NDP Leader Rachel Notley did not bring in a sales tax when she was premier before Kenney was elected in 2019. She agrees with the UCP that it would be a debilitating blow to a fragile economy.

Notley says the solution begins with further diversifying the economy and building on Alberta’s strengths of a young educated workforce, a burgeoning tech sector and entrepreneurial business owners.

Oil and gas are key, she adds, but warns that Kenney’s blinkered focus on them to the exclusion of other opportunities will be the province’s undoing.

“If (Kenney) continues to insist on operating through an ideological lens, which is squarely focused backward by about 25 years … then we are in big trouble.”

The economy is also a political question. The United Conservatives reach the midpoint of their mandate in 2021 and early initiatives, including a deep slash to the corporate tax rate, have yet to bear fruit.

Political scientist Duane Bratt said COVID-19 and the economy are destined to again slam into each other in 2021. The government has said that after the pandemic is over it will follow through on saving money in health care including reducing or outsourcing 11,000 jobs.

“How do you say, ‘Thank you for all the hard work (during the pandemic). Here are your layoff papers?’” said Bratt with Mount Royal University in Calgary.

Broadly speaking, Bratt said, the NDP is more trusted by the electorate on the health file, while the United Conservatives own the economy. That raises future ballot box questions two years from now, if the UCP has angered Albertans with its health decisions while failing to get the economy going.

Said Bratt: “If the economy trumped everything in 2019, does health trump everything in 2023?”

Dean Bennett, The Canadian Press

Alberta budgetCoronavirus

Just Posted

Patrons rip around a corner on the go-kart course at Lakeshore Go-Karts and Mini-Golf. (Photo by Megan Roth/Sylvan Lake News)
Sylvan Lake go-kart and mini golf course reopens after fire

Last August the outdoor facility was shut down after a fire burned through much of the business

(File photo from The Canadian Press)
Red Deer down to 66 active COVID-19 cases

Red Deer has lowest number of active cases since last November

A small selection of shoes line a step at the Municipal Government Building in Sylvan Lake, with each pair representing a vicitm of residential schools in Canada. Tracey Greinke placed the first pair of shoes on the steps, hoping more would follow. (Photo by Megan Roth/Sylvan Lake News)
Sylvan Lake woman sets up small memorial for residential school victims

Tracey Grienke placed a pair of moccasins on the steps of town hall, and a few more followed

FILE – Perry Bellegarde, National Chief of the Assembly of First Nations, takes part in an event on Parliament Hill in Ottawa on Tuesday, July 7, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Indigenous Peoples Day must be a ‘call to action’, says Assembly of First Nations chief

Discovery of children at Kamloops residential school site must lead to change, Perry Bellegarde says

Left handed pitcher Evan Wilde started the game for Sylvan Lake and allowed four runs in the 12-10 extra-innings loss against the Edmonton Prospects on Sunday in Western Canadian Baseball League play. (Photos by Byron Hacket/Blakc Press News Media)
Historic opening weekend for Sylvan Lake Gulls

The Gulls finished the opening weekend with one win and two losses

The border crossing into the United States is seen during the COVID-19 pandemic in Lacolle, Que. on February 12, 2021. THE CANADIAN PRESS/Paul Chiasson
VIDEO: Border quarantine to soon lift for fully vaccinated Canadians

Eligible travellers must still take multiple COVID-19 tests

Fans watch the warm-up before Game 6 between the Toronto Maple Leafs and the Montreal Canadiens in NHL playoff hockey action Saturday, May 29, 2021 in Montreal. Quebec’s easing of COVID-19 restrictions will allow 2,500 fans to attend the game for the first time in fourteen months. THE CANADIAN PRESS/Ryan Remiorz
Two-thirds of Canadians say governments shouldn’t lift all COVID-19 restrictions

Poll reports Canadians who gained pandemic weight say they have gained 16 pounds on average

Paul Bernardo is shown in this courtroom sketch during Ontario court proceedings via video link in Napanee, Ont., on October 5, 2018. Teen killer and serial rapist Paul Bernardo is set for a parole hearing today. The designated dangerous offender, has been eligible for full parole for more than three years. Bernardo’s horrific crimes in the 1980s and early 1990s include for kidnapping, torturing and killing Kristen French and Leslie Mahaffy near St. Catharines, Ont. THE CANADIAN PRESS/Greg Banning
Killer rapist Paul Bernardo faces parole hearing today; victim families opposed

Designated dangerous offender has been eligible for full parole for more than three years.

People look over the damage after a tornado touched down in Mascouche, Que., north of Montreal, Monday, June 21, 2021. Dozens of homes were damaged and one death has been confirmed. THE CANADIAN PRESS/Ryan Remiorz
One dead and extensive damage as tornado hits Mascouche, Que., north of Montreal

Damage reported in several parts of the city, and emergency teams dispatched to sectors hardest hit

FILE - In this Nov. 29, 2020, file photo, Las Vegas Raiders defensive end Carl Nassib leaves the field after an NFL football game against the Atlanta Falcons in Atlanta. Nassib on Monday, June 21, 2021, became the first active NFL player to come out as gay. Nassib announced the news on Instagram, saying he was not doing it for the attention but because “I just think that representation and visibility are so important.” (AP Photo/John Bazemore, File)
Nassib becomes first active NFL player to come out as gay

More than a dozen NFL players have come out as gay after their careers were over

A pair of Alberta residents were arrested after police responded to a report of a woman who had allegedly been assaulted and confined against her will on June 20, 2021. (File photo)
Salmon Arm RCMP arrest 2 Albertans suspected in alleged assault, unlawful confinement

Firearms, stolen items seized including NHL hockey cards believed to be worth thousands

A man makes his way past signage to a mass COVID-19 vaccination centre at the University of Toronto’s Mississauga campus during the COVID-19 pandemic in Mississauga, Ont., on Monday, May 17, 2021. THE CANADIAN PRESS/Nathan Denette
Canadians encouraged to see mRNA shots as interchangeable as more 2nd doses open up

Doctors urge people not to hesitate if offered Moderna after getting Pfizer for their first shot

Chief of Defence Staff Jonathan Vance sits in the front row during a news conference in Ottawa on June 26, 2020. THE CANADIAN PRESS/Adrian Wyld
Defence committee rises without report on Vance allegations

Committee had been investigating the government’s handling of complaints against former defence chief

Tl’etinqox-lead ceremony at the site of the former St. Joseph’s Mission in Williams Lake, B.C., June 18, 2021. (Angie Mindus photo - Williams Lake Tribune)
‘We are all one people’: Honouring residential school victims and survivors

Love, support and curiousity: Canadians urged to learn about residential schools and their impact

Most Read