For three years, steadily rising oil prices have allowed the Alberta government to spend like there's no tomorrow. And then tomorrow showed up.
"Special Ed" Stelmach is running into the same problem as Harper. After riding high on the hog, plummeting oil prices are leaving Ed with a lot of unfunded expectations. It's gotten Ed musing about having to introduce a repeat of the old Klein "slash and burn" cost cutting. According to the Calgary Herald, forces are massing to oppose such a move:
Opposition parties, labour unions and other interest groups said the province's social and environmental programs can't handle another round of 1990s style budget slashing, which Stelmach floated Thursday as a potential way to deal with a revenue shortfall in the coming fiscal year.
The Alberta Liberals accused the government of panicking in a cyclical economy and turning to the only strategy they know.
"This shows a complete lack of imagination," deputy leader Laurie Blakeman said. "Albertans feel that they made their sacrifices, they tightened their belt in the '90s to get out of this and many of them feel that they're now being asked to do that again."
The province's revenues are in free fall, with oil trading Friday around $36 US a barrel, down from a high of $147 this summer. With the economic downtown, corporate and personal income taxes are also expected to be much lower than previous years.
Compounding the revenue dip is the fact government spending has increased almost 30 per cent over the past two years to $38 billion. Yet, legislation passed by former premier Ralph Klein prevents the government from running a budget deficit.
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