Less than a day after Premier Alison Redford delivered a televised State of the Province address – her critics are openly questioning her government’s plans to save money while the province faces a multi-billion dollar deficit.
During Redford’s address Thursday evening, she talked about the impact falling revenue from Alberta oil is having on the province’s finances, causing the province to lose about $6 billion.
She referred to difficult decisions the province would have to make in terms of cutting back on services and programs – but did not go into specifics.
However, she also said her government was planning on investing some the revenue the province will earn into the Heritage Savings Trust Fund – the plan is slated to be part of the provincial budget which will be tabled in March.
“It would almost be like taking some of your paycheque and putting it into a savings account, while you’re racking up your credit card bill,” Political Scientist Duane Bratt said.
The plan quickly drew criticism from Redford’s opposition.
“If we’re going to be cutting program expenditures because there’s not enough money,” NDP Leader Brian Mason said. “Then it’s not really the time to start saving is it?”
“It’s impossible for them to put money into the Heritage Savings Trust Fund while we’re running multi-billion dollar deficits,” Wildrose Leader Danielle Smith said. “It doesn’t make sense.”
However, Richard Dixon with the U of A School of Business said the PC plan to save money is similar to one a bank might advise a client to handle a debt problem.
“What the bank is going to tell them now is that ‘We want you to get into a saving mode, you’re going to pay off your debt but you’re also going to get into the practice of learning how to save’,” Dixon said.
The fund was created in 1976 by the then-premier, the late Peter Lougheed, as a way for the province to save, and invest cash from oil and gas royalties – and the provincial government has not added funds to it since 1987.
Dixon said Redford’s plan is a return by the provincial government to its roots.
“What the premier’s done, and I think quite wisely, is to be able to say ‘Yes, we’re going to start doing that’,” Dixon said.
“Just the way the Wealthy Barber says you do at home, you pay yourself first,” Redford said in an interview with CTV Calgary Friday.
“We can always afford to save.”
As for the fund itself, there was $16 billion in the account in November, the last time the province released an update.
The province is set to release an update on the Heritage Trust Fund next month.
With files from Susan Amerongen
