Due to a drastic drop in oil prices – which dipped below $50 per barrel last week – many across the province are wondering if the “Alberta Advantage” will be able to weather the impending economical storm.
Premier Jim Prentice stated last week that he predicts a deficit of $500 million this year. During a Jan. 13 speech to the Edmonton Economic Development Corporation Impact Luncheon, Prentice stated that “everything is on the table” when it comes to finding ways to offset this shortfall – opening the door to the idea of a provincial sales tax, among other potential solutions.
“This is going to be a very difficult and very challenging year,” Prentice said at the luncheon. “It is a time that’s going to require, on the part of all of us, caution, prudence and discipline.”
When asked about a sales tax, Premier Prentice said it’s an idea he is willing to discuss.
“I don’t think Albertans, generally, advocate a sales tax, but I am prepared to be educated, and to hear from people in terms of the discussion that we’re going to have,” he said. “We need to have a long-term fiscal plan to get out of the circumstance we’re in, and we have to be cognizant we don’t make mistakes and go too far too fast.”
According to Lac La Biche-St. Paul-Two Hills MLA Shayne Saskiw, this situation is something the government should have seen coming.
“It should come to no surprise to the government that the price of oil goes up and down,” Saskiw said in a Jan. 14 interview with the Journal. “That’s why it’s unfortunate that over the past five years we’ve had record revenues in this province, yet not enough money was saved to dampen the impact during these tougher times.”
Saskiw has also been very vocal about the Wildrose Party’s aversion to introducing a provincial sales tax.
“You can’t tax your way out of low oil prices,” he said. “The last thing the economy needs during a slowdown is for the government to impose a tax. A sales tax is a tax on everything – a new car, groceries, diapers for a young family – this is the last thing that we need.”
Instead of imposing new taxes, Saskiw feels that Alberta’s Progressive Conservatives should instead look for other ways to cut spending, first by taking a look in the mirror.
“We have a very bloated bureaucracy, a very bloated government, and now it looks like Albertans are going to have to pay for that, unfortunately,” Saskiw said. “The premier said every single Albertan is going to suffer as a result of this slowdown. Well, not every Albertan – politicians aren’t. The first thing they should do is lead by example and repeal the seven per cent pay raise that the PC government gave themselves.”
Saskiw also feels that there are many other areas where the government could find money to help soften this economical blow.
“For example, do we need hundreds upon hundreds of executive vice presidents in Alberta Health Services, or should we put the money solely to the front line staff – the nurses, the doctors, the nursing aids – that actually provide the key services to Albertans?” he said.
Regardless of how the politicians decide to deal with this situation, the effects are sure to be felt by Albertans, one way or another.
Locally, the St. Paul and District Co-op – an institution engrained in the community with a finger on its economic pulse – is confident it will make it through to the other side of this potential crisis.
“We are no stranger to the challenges that the local economy may present to us,” said general manager Graham Getz. “Since we are 100 per cent local, we can adapt the road in front of us to accommodate the economic challenges or successes we are facing.”
Though the Co-op boasts both a gas bar and a cardlock, the fact that they also provide other products should help the business weather the storm, he said.
“We are a diverse organization that provides a wide blend of commodities,” Getz said. “We have always been successful by depending on certain commodities when others are being challenged.”
While the Co-op has always diversified, Saskiw feels that the provincial government has perhaps been too reliant on one specific sector.
“The time for diversifying, ideally, would have happened a long time ago,” he said. “Right now what we would like to see is for the government to look very closely at every program that is being initiated right now, and see if monies can be saved without affecting the services that are being provided to Albertans.”
