REBROADCAST： Premier Smith's Address to the Province
Episode Stats
Words per Minute
148.80823
Summary
Learn English with Alberta s Premier Rachel Notley. In this episode, Rachel talks about Alberta s approach to balancing the province's budget and how it plans to do so in the future. She also outlines a new long-term strategic financial plan for Alberta, and offers an alternative to relying on non-renewable resource revenues.
Transcript
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My fellow Albertans, with this year's budget approaching and economists predicting softer
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oil and natural gas prices this upcoming year, I want to take a moment to share with you
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how our government intends to manage the provincial budget and finances in the years ahead.
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Although I'm pleased to report that spending cuts will not be needed to balance this year's
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lower resource revenues will certainly require us to show more restraint than previously predicted.
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We will ensure this is done thoughtfully and with priority given to the programs and services
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Albertans most rely on, such as health, education, and social supports. In addition, promised personal
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income tax cuts will have to wait a year and be phased in responsibly. As we all know, Alberta is
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blessed with abundant natural resource wealth. However, the volatile price of oil and gas often
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has us riding a budget roller coaster from year to year and trying to predict world oil and gas
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prices is much like trying to predict the weather during an alberta spring i and i suspect most of
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you are growing tired of this budget volatility bouncing between years of plenty and then having
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to choose between incurring massive debt or cutting key social programs is not the recurring
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story albertans want to see time and again it is time for our province to implement a long-term
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strategic financial plan that gets us to a stable balanced budget each and every year
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with predictable and stable revenues to fund our core social programs
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and that long-term plan is what i wish to talk with you about tonight alberta has one of the
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largest deposits of oil and natural gas on the planet through alberton's ingenuity hard work
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and entrepreneurship coupled with the foresight of thoughtful provincial leaders including ernest
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Manning, Peter Lougheed, and Ralph Klein. Our province has built itself up from humble prairie
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beginnings into an energy superpower with one of the most successful and growingly diverse
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economies in the world. In fact, that economic vitality has driven growth and opportunity
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right across the entire country. We have used the fruits of our vast resources to build a province
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of almost 5 million people with world-class cities, parks, transportation networks, schools,
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health facilities and other social infrastructure and we have established a strategic tax advantage
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that we are using to further attract investment and diversify our economy we're doing a lot right
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and we have much to be proud of but as a province we've also made mistakes and we need to correct
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course now while we still have time bluntly stated our province has become unsustainably dependent
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on non-renewable resource revenues as an example in budget 2023 our province required about 16
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billion dollars of resource royalties just to balance our roughly 70 billion dollar provincial
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budget thankfully we had a good year and will collect enough resource revenues to cover that
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16 billion dollars with a few billion left over to pay towards our provincial debt and savings
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for the future that said we simply cannot continue to rely on 16 billion dollars or more
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in resource revenues to balance our budget year in and out that is a recipe for massive debt and
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cuts to health and education when the price of oil takes a dip for a year or two or more
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it is not sustainable some say the answer is higher income taxes or a sales tax i reject this
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We only need to look at some of our fellow provinces and many U.S. states
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to know that increasing these kinds of taxes to balance a budget is a recipe for economic decline.
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That will not be the approach of our government.
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Peter Lougheed had the foresight to create what is today commonly called the Alberta Heritage Fund.
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The initial purpose of this fund was to invest a portion of Alberta's non-renewable resource revenues each year
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so the investment income earned on the fund would eventually grow large enough to eliminate our
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province's reliance on resource revenues when they ultimately declined. Turns out that vision
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was well ahead of its time. In fact, several countries, such as Norway and many other oil
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and gas-producing nations around the world, adopted that same strategy, and now boasts
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sovereign wealth funds large enough to entirely eliminate their nation's reliance on resource
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revenues. In fact, these nations now earn enough each year in their funds to make massive
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investments in world-class infrastructure and other public benefits that were not previously
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possible. In Alberta, if we had just reinvested the income earned in our heritage fund from the
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Lougheed government's initial deposits of about $12 billion in the late 70s and early 80s,
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even without investing another extra dollar, our heritage fund would be worth over $250 billion
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dollars today, earning between 12 and 25 billion dollars per year in revenue. This means we would
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have been earning enough interest today to make us entirely unreliant on resource revenues. But
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for a variety of reasons, from both within and without Alberta, we did not do this as a province.
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Of course, now is not the time for us to bemoan what might have been. In my view, the time has
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come to act decisively and end any further procrastination. Last year, our government
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passed a law mandating that all income earned in the Alberta Heritage Fund must be invested in the
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fund rather than spent. During the current budget year, we hope to invest and reinvest approximately
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$3 billion of surplus and investment income back into the Heritage Fund, increasing its value to
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almost $25 billion. That's up from $17 billion just a couple of years ago. This puts us back on
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the right track. In addition, I have instructed our finance minister to limit government spending
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to below the legislated rate cap of inflation plus population growth, not just during lean years with
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lower oil prices as we expect next year, but also in years when high oil and natural gas prices
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result in billions of surplus provincial dollars. Instead of spending all that non-renewable surplus
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cash on the wants of today, we will be fiscally disciplined, invest in the Heritage Fund annually,
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strategically pay down maturing debt and slowly but surely wean our provinces budget off the
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volatile roller coaster of resource revenues. In my view our province has one last shot at
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getting this right. We still have several decades during this global energy transition where
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nations will desperately need our oil and gas resources for their people and we will provide
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it to them with the most advanced environmental technology on earth. So despite this coming
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years predicted global economic slowdown i believe our province is on the cusp of an unprecedented
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and prolonged energy resource boom one that will include both hundreds of billions in investment
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and tens of thousands of new jobs not only in oil and gas production but also in designing
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and building the most advanced emission reduction technologies on earth it is going to be an exciting
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time for our province and for canada especially once we finally get a federal government that
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acts like a strategic partner rather than a delusional adversary. Prior to the end of this
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year, our government will publicly release a long-term financial plan charting a path to a
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heritage fund of between $250 and $400 billion by the year 2050. 2050 is also our target for
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achieving a carbon-neutral economy. Meeting these two goals simultaneously with Alberta technology,
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determination, and ingenuity will leave an invaluable legacy for future generations of
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but we need to start today and stick with it fervently,
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I ask for your support as our government commits itself
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to placing our province on this path to prosperity
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that will last long after our last barrel of oil
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and may Alberta remain forever strong and free.