Western Standard - February 25, 2022


EXCLUSIVE： Alberta Finance Minister Travis Toews on the budget.

Topics
balanced budget fiscal rule for Heritage Fund diverse revenue base COVID and healthcare investments
Mentioned
Corey Doug Horner Teys
LIVE - Triggered： Try to stay focused as the world goes mad. WATCH： Calgary lawyer commends ruling denying parent-forced COVID vax for kids

Episode Stats


Length

9 minutes

Words per minute

170.11

Word count

1,643

Sentence count

130


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

For the first time in a long time, Alberta has a balanced budget. Finance Minister Doug Horner and his team were able to balance the budget after a challenging few years. In this episode, we talk to Finance Minister Tays Taylor about the reasons why the budget was balanced and what they plan to do to keep it balanced in the future.

Transcript

Transcript generated with Whisper (turbo).
Topics generated with Qwen2.5-3B-Instruct.
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.000 Well, Minister Tays, thank you very much for joining us today. And it's for the first time
00:00:08.820 in a long time, we've seen a balanced budget. We've really needed some good news over this
00:00:13.100 last couple of years. So I imagine it must have been nice to be able to present that yesterday.
00:00:18.360 It was a real pleasure. It's a privilege to present a balanced budget on behalf of Albertans.
00:00:23.580 It's been, I believe, Doug Horner was the last finance minister that ultimately balanced the
00:00:29.040 budget in this province. And that's been too long. It was a real privilege to get to balance.
00:00:35.380 Great. So, I mean, it still, of course, raises a lot more questions now that we look in the longer
00:00:40.120 term. Part of why the budget was balanced, of course, was some very high commodity prices these
00:00:46.220 days. And we know those tend to go up and down. Is there plans, though, to moving? I mean,
00:00:51.300 there are spending increases. We understand it's been a challenging few years, but moves towards
00:00:55.900 fiscal restraint in the incoming years so we can maintain these balanced budgets?
00:01:00.560 Well, absolutely, Corey. In fact, a big part of the reason why we're balanced in this upcoming
00:01:06.680 budget is because of fiscal restraint. We inherited a government that was spending $10 billion more than
00:01:12.320 comparative provinces. The cost trajectory was going up 4% per year. Had we stayed on that trajectory,
00:01:19.640 we would have been showing a $6 billion deficit in the upcoming year. It was only because we've
00:01:26.680 turned spending down. We've flattened spending, brought our cost up per capita of delivering
00:01:31.280 government services down. We've aligned it now with other provinces, which was a key fiscal anchor.
00:01:36.860 And that's, again, a big part of the balanced budget story. I mean, you talk about higher energy
00:01:42.160 prices and, you know, we're benefiting from those higher prices, but we're using, I would say, very modest
00:01:48.800 energy price assumptions in this budget. We're using $70 for 2022, $69 for $23, and $66 for $24. So we're not,
00:01:57.700 you know, this isn't a balanced budget on $80 and $90 oil. This is a balanced budget on very cautious but
00:02:03.040 credible energy price assumptions. Yeah. And with those cautious assumptions and assuming things stay,
00:02:09.220 though, as most people feel they will in the commodity world, there's probably going to be more
00:02:13.380 surpluses to come in future budgets. What about debt retirement? I mean, we still have the debt now hanging
00:02:19.000 there and we're lucky that interest rates are low right now, but that won't last forever. Is there going to be a
00:02:23.800 longer plan to start knocking that net debt away on us? Well, you know, Corey, we will develop a very
00:02:29.940 comprehensive plan to deal with unexpected surpluses. Right now, we're projecting very modest surpluses. And I will say
00:02:36.120 this, what we will do with a modest surplus is just reinvest that into the Heritage Savings Trust Fund.
00:02:42.960 As you probably know, over the last number of years, governments have been pulling Heritage Savings
00:02:47.880 Trust Fund investment income into general revenue. And the first thing we're going to do is stop robbing
00:02:53.320 that Heritage Savings Trust Fund. Once we are reinvesting those earnings into the fund, at that
00:02:59.400 point in time, we will consider our options and either debt retirement or further trust fund
00:03:05.600 investments. One of the two are a combination of both. Obviously, we're going to have to consider
00:03:09.480 our cost of capital, the time of debt maturity, and inflation rates and a number of other factors.
00:03:15.300 And I will be very interested in hearing from Albertans around that question.
00:03:20.140 Great. Actually, you got ahead of me there. I was going to ask if you were going to start putting
00:03:22.680 money back into that Heritage Fund. Is there legislative controls or ways, though, that we could perhaps
00:03:27.300 assure that, you know, yourself or even future governments have to go through a bit more of a process
00:03:31.740 before rating it as we've seen in the past? Well, absolutely. Right now, there is a fiscal rule.
00:03:36.580 I think a very, very good baseline fiscal rule that requires reinvestment in the Heritage Savings
00:03:41.940 Trust Fund up to inflation or CPI. So we've, of course, been following that. And the fund has been
00:03:47.960 growing, but not, you know, not growing in real terms. It's just been keeping up with inflation.
00:03:53.940 We're going to consider fiscal rules for unexpected surpluses in the future. And again,
00:03:59.360 right now we would anticipate a combination of debt retirement and further investments into that
00:04:05.500 Heritage Savings Trust Fund. One thing we will not do is open up the wallet and start spending
00:04:11.720 irresponsibly. Okay. And then on the other aspect, you get some more breathing space for perhaps
00:04:17.180 some tax relief. A large part of the budget was balanced on revenue from personal income taxes,
00:04:22.740 which is a good sign of a strong economy. But we do have that ongoing bracket creep going on.
00:04:27.400 And is there plans to address that now that we're going into the future?
00:04:31.420 The answer is yes. We made a commitment to Albertans that we were going to pause indexation
00:04:36.940 until basically we got to balance, until we got to a firm fiscal footing. And right now,
00:04:43.380 we're projecting a balanced budget. We're not there yet. As we work through the year,
00:04:47.920 and as our price assumptions, economic assumptions, as we determine they're going to hold true,
00:04:54.480 we will consider re-indexing for 2023.
00:04:59.000 Okay. And then, you know, it's an ongoing question, getting away from commodity dependency. I mean,
00:05:05.100 again, it's not the whole basis of balancing the budget, but it's a large part of it. And we've been
00:05:09.920 overly reliant, in my view, on it for a long time. So what sort of plans are there? It's always the
00:05:15.200 economic diversity, I guess, that people are always chasing. What sort of plans have you got to get
00:05:20.600 this so that we can start balancing these budgets without higher oil prices?
00:05:24.240 Well, I mean, there's two things to look at there. I mean, realistically, there's your revenue
00:05:29.760 structure as a jurisdiction. We have a very definitive taxation royalty structure in this
00:05:34.560 province that ultimately generates revenues. And at some point in time, we've committed to
00:05:38.680 appoint a revenue panel that would evaluate the appropriateness and structure and efficiency
00:05:43.980 of our revenue system here in Alberta. We will do that before the end of the term.
00:05:47.880 But the other way to create less volatility, Corey, and I think you're alluding to this
00:05:52.440 for government revenues, is to see more diversification in our economy. And from day one,
00:05:58.880 we've been working to position the province for disproportionate investment attraction
00:06:02.720 and economic growth. And that's happening. We've taken a broad-based approach. In other words,
00:06:08.360 an approach that doesn't pick winners and losers so much, but provides a level playing field,
00:06:14.460 which I believe will result in sustainable economic diversification. And we're seeing
00:06:19.860 the investment pour into this province. We can look at the tech sector, the growth in that sector
00:06:24.540 over the last few years. We can take a look at agriculture and agri-food manufacturing.
00:06:30.760 Certainly, the aerospace and aviation sector is growing. The manufacturing sector
00:06:35.100 is growing significantly in the province. Certainly, we're seeing lots of announcements,
00:06:40.040 multi-billion-dollar announcements around petrochemical manufacturing and hydrogen.
00:06:45.460 So all of this is leading to a more diverse, less volatile revenue base for the province.
00:06:51.300 So that has to be part of the plan. And it will continue to be a key plank in improving our fiscal
00:06:57.680 sustainability.
00:06:58.940 Great. So I can assume there's no plans to raise the corporate tax rate or anything like that,
00:07:03.840 I imagine, then.
00:07:05.220 Listen, Corey, we intentionally reduced our business tax rate from 12% to 8%. That's been a key ingredient
00:07:11.640 in ensuring we have the most competitive business environment possible. We committed to that. We're
00:07:17.380 going to stay with it.
00:07:19.580 Excellent. Just one area, as we close up, there was some increased spending, and I think people
00:07:24.080 kind of expected it, though, was in healthcare. We're looking at, you know, hopefully broadening our
00:07:29.300 provision abilities so that we aren't as vulnerable when incidents such as this pandemic happen. Is
00:07:33.940 that going to be targeted spending then to ensure we reduce the, you know, the pressures on ICU and
00:07:40.080 hospital capacities?
00:07:41.880 Absolutely. We're making further investment in healthcare. We're increasing healthcare's
00:07:46.440 budget this year by $600 million. And no doubt there are pressures in the system. But the real
00:07:51.700 focus is around expanded capacity. COVID has really demonstrated the lack of margin that we have in
00:07:59.040 our healthcare system, the lack of surge capacity that we have in our ICUs, for instance. And so a lot
00:08:04.840 of this investment is going to be targeted to strategic increased capacity in healthcare, including
00:08:10.420 expanded ICU capacity.
00:08:13.540 Great. Well, thank you very much for your time today, Minister Teys. And I hope we can look forward
00:08:18.140 to talking about balanced budgets for some time to come yet.
00:08:20.940 So do I, Corey. Thank you.
00:08:22.220 Algodex is owned by Algonada. This is great new technology just coming online now in the digital
00:08:30.740 currency world. Algodex is a great way for you to use the digital currency Algorand in your day-to-day
00:08:38.380 transactions. Can you imagine a world where we don't have to buy a cup of coffee using a federal dollar
00:08:44.180 and you don't even have to use the American federal dollar? You don't have to use the euro or the pounds
00:08:48.860 sterling. You can use real money, digital currencies that are not at the beck and call of governments
00:08:54.680 and inflation. Algodex is making digital currencies usable in a day-to-day basis.
00:09:18.860 Alіз and thank you very much for watching!
00:09:19.680 A.B.I. adECANSE
00:09:20.080 A.B.I. adECANSE
00:09:25.560 A.B.I. adECANSE
00:09:27.620 A.B.I. adECANSE
00:09:31.820 A.B.I. ad igenSE
00:09:33.580 I.A.B.I. adECANSE
00:09:38.140 A.B.I. adECANSE