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Budget deficit soars to $5.25 billion

EDMONTON, AB (February 19, 2013): The PC government’s pre-election budget, built intentionally on irresponsible promises and wildly optimistic revenue projections, continues to unravel with news today the deficit for 2012-2013 has grown to $5.25 billion.

At today’s third quarter fiscal update, Finance Minister Doug Horner announced the projected deficit for this budget year is more than $4 billion larger than originally forecast on Feb. 9, 2012 – the day it was introduced. Taken together with capital spending and debt, the total cash shortfall for the budget year now stands at approximately $5.25 billion. This will drain the Sustainability Fund from $7.5 billion at the beginning of the year to $2.5 billion and add $250 million to the provincial debt. Wildrose Official Opposition Leader Danielle Smith said the fiscal update is further confirmation that the budget Premier Alison Redford put forward to Albertans before the election was nothing more than an overhyped and 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.” In the wake of yet another report criticizing the PCs budget management, this one from the Fraser Institute, Wildrose Finance Critic Rob Anderson said chronic overspending has put future generations of Albertans at risk. “This government has vaporized our savings and is now plunging us back into debt,” Anderson said. “It will be our children who will be on the hook to pay for it. Thanks to this government, they will be drowning in debt servicing costs while trying to maintain essential services like health care and education. They have set this province back 20 years or more with chronic wasteful and overspending.” Anderson said the government’s promises to freeze managerial salaries and reduce senior management by 10% don’t go far enough. He said the freeze only comes after a managerial pay hike last summer and management reductions should be closer to 50%. “If this government is serious about leading by example, they can give back the pay hikes they gave themselves last year,” Anderson said. “Albertans are looking for leadership on fixing this budget mess and the measures announced today just don’t cut it.”