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Budget 2013: Back in debt

EDMONTON, AB (March 7, 2013): Premier Alison Redford has plunged Alberta back into debt for the first time in a generation with Budget 2013, saddling Alberta taxpayers with structural deficits, billions in debt interest and no real plan for getting out of the debt hole. 

Alberta’s sixth consecutive deficit budget, tabled today by Finance Minister Doug Horner, includes a $5.5 billion cash shortfall, $3.5 billion dollars in new debt, $2 billion drained from the Sustainability Fund and more than $200 million in debt servicing costs. Alberta’s debt will stand at nearly $17 billion by the 2016 election. “This is the back in debt budget,” Wildrose Official Opposition Leader Danielle Smith said. “Premier Redford said that this is a once in a generation budget and she’s absolutely right. It took a generation for Albertans to pay off Premier Don Getty’s debt and it will take a new generation to pay off the $17 billion dollars in new debt built up by Ms. Redford before 2016.” BACK IN DEBT: Budget 2013-14 by the numbers:

  • $3.5 billion – New debt this year, doubling the amount to over $8 billion next year
  • $16.9 billion – New debt before the next election, the original amount of the    Sustainability Fund
  • $5.5 billion – Budget 2013-14 cash deficit.
  • $2 billion – Amount taken from the Sustainability Fund in 2013-14
  • $691 million – What will remain in the Sustainability Fund after Budget 2013-14
  • $1.4 billion – Operational deficit for the current budget year, 2012-13
  • $451 million – Operational deficit for Budget 2013-14
  • $238 million in debt servicing in 2013, $404 million in 2014, $593 million in 2015

Wildrose Finance Critic Rob Anderson notes that every last dollar spent on infrastructure projects for the foreseeable future will come from debt with no clear plan for how it will be paid back. “This is the greatest squandering of wealth in our province’s history,” Anderson said. “This government talks about living within its means, but it is spending so far beyond its ability that our children are going to forced to pay their bills. Premier Redford is taking Alberta down a dark path, one that we’ve been down before, and we know where it leads.” Anderson also criticized the government’s new borrowing-to-save policy. “Saving money is a great idea as long as you’re not going into debt to do it,” Anderson said. “That’s like taking out a second mortgage to invest in an RRSP. It’s an absolutely foolish policy that makes no economic sense.”