'Difficult choices’ needed to deal with debt: government advisory panel

Province hires panel to help balance budget The “Blue Ribbon” panel advice the new government on how to balance the budget. CTV Edmonton’s Dan Grummett has more.

Premier Jason Kenney announced Tuesday a “blue ribbon panel” as the first step in balancing Alberta’s budget by 2022-23 without raising taxes.

According to the premier, the panel will advise the government on how to keep its campaign promise in a report this summer, which will be used in forming the fall budget.

Kenney said Alberta’s fiscal situation “appears to have deteriorated” since the NDP government’s last quarterly update in February. At the time, the provincial government under Rachel Notley said the deficit had dropped nearly $2 billion since Budget 2018, to $6.9 billion.

But Kenney said Alberta’s net financial asset position has “suffered a $60-billion reversal” by accumulating nearly $30 billion in debt.

“We’re spending about as much on interest as we are on half of the budget for social services. This just cannot continue,” he said.

The chair of the panel, former Saskatchewan Finance Minister Janice MacKinnon, told media she believes the budget can be balanced without introducing new revenue streams.

“We can make difficult choices, but also protect frontline services and programs,” she said Tuesday.

MacKinnon was responsible for several portfolios in Saskatchewan between the 1990s and early 2000s, and was part of the effort that saw Saskatchewan become Canada’s first province to balance its budget.

While the Tuesday announcement didn’t mention cuts, MacKinnon did acknowledge that things would change.

“One of the easiest things for a government to do when they’re facing a tough choice is not to take the tough choice, but to spend. And I say this happened in this province,” Mackinnon said.

“You have to prioritize, you have to have some fiscal discipline, because in the long term then you have more money.”

She said the panel would look at ways to reduce spending through “restructuring programs” or asset sales—not taxes.

But the official opposition questioned how that would be possible with Kenney’s promise to slash corporate taxes.

“They will not be able to give him a balance by 2022 after removing $4.5 billion dollars without making massive cuts,” Deron Bilous, NDP MLA-elect, said.

A University of Calgary economics professor anticipates the tough choices will take place in health care, which accounts for 40 per cent of government spending.

“They'll be looking at ways of reforming health care, presenting health care different than they do now,” Ron Kneebone told CTV News.

“Hopefully giving us the same outcomes with less money.”

While it won’t immediately look to taxes, Kenney did tell reporters his government planned to honour a platform commitment to examine tax reform in the later years of his government: “I would anticipate in roughly 2021-2022 we will see an expert panel to advise us on the optimal tax structure in Alberta for jobs and growth.”

Economics professor and former Dean of the University of Alberta School of Business Michael Percy will act as the panel’s vice chair. He served as the opposition shadow finance minister for the Liberals in the 1990s.

The panel’s four members are:

The panel is to provide a report by Aug. 15.

With files from Dan Grummett