Vercoe: Advice from Alberta’s Treasurer to next Treasurer: ‘Don’t be afraid to say no’


Alberta’s outgoing Treasurer has some sage advice for Alberta’s next Treasurer.

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Keep your balance and be prepared to turn down a colleague if things get tough.

“Don’t be afraid to spread your reputation as a cabinet minister who says ‘no’,” said outgoing Finance Minister Travis Towes, who is due to hand over his portfolio on Friday, in an interview.

“Finance ministers can play a lone role. They have the ultimate mandate to ensure a strong balance sheet, sound financial statements and a balanced budget. All other ministries have different mandates and all other ministries need those resources.

“So my advice to the next Minister of Finance? Don’t be afraid to say no. It means that

With Prime Minister Daniel Smith set to announce a new cabinet on Friday, political watchers will be watching to see who will take over the chores of overseeing Alberta’s $71 billion spending plan.

Although Alberta’s economic outlook is brighter than most provinces this year, a high level of uncertainty still exists.

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Prime Minister Daniel Smith announces his election campaign at a warehouse near Calgary International Airport on May 26, 2023. Gavin Young/Postmedia

Rates continue to rise after the Bank of Canada made a surprising decision on Wednesday to raise the overnight rate by 25 basis points to 4.75%. That comes after inflation rose 4.4% in April compared to the same month last year (4.3% in Alberta).

All three separate forecasts released this week expect Alberta to report the nation’s highest economic growth rate (2.4%) in 2023, but well below last year’s level. indicates that there is

ATB Financial also forecast Thursday that the state’s economy will grow 2.2% in 2024, reflecting rising interest rates, falling commodity prices and a weak global economy.
Another issue is the economic impact associated with last month’s wildfires in Alberta, which temporarily halted production of an estimated 300,000 barrels of oil equivalent (boe) per day last month.

But the state’s population growth in the fourth quarter was the highest since the 1980s, and a boost in capital spending in the energy sector also helped.

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Alberta leads the provinces while Canada’s economy grows at just 1.3%, according to a report released Thursday by RBC Economics. (Both the Bank and the Council of Canada expect the province’s GDP to expand by 2.4% this year.)

RBC expects the benchmark West Texas Intermediate (WTI) oil price to average $78.40 a barrel this year.

“We’re going to sit back a bit, but compared to the rest of Canada, Alberta is in a much stronger position than most other provinces,” RBC economist Rachel Battaglia said.

But as talk of a possible recession continues in Canada, there are also deep-seated questions about the employment outlook. Sanko Energy plans to cut 1,500 jobs by the end of the year, while pipeline giant TC Energy confirmed earlier this week that it will cut an unspecified number of jobs.

Another challenge lies ahead for Alberta’s incoming finance minister.

WTI crude oil prices were trading near $71 a barrel on Thursday, about $8 below expectations in the March budget. (Each time WTI prices fall by $1 a barrel during the budget year, state revenues will decrease by $630 million.)

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At the eastern edge of Calgary, you’ll find Pumpjack surrounded by rape blossoms. Photo credit: Jim Wells /post media

And while the last budget set aside $1.5 billion in reserves for unexpected spending, the state could end up costing more than expected to combat wildfires and other emergencies.

The UCP government expects a surplus of $2.4 billion this year, and the party released a number of election promises last month, including a $1 billion pledge to create a lower income tax bracket.

New state laws requiring the government to balance its books will put pressure on the Smith government to avoid deficits, although some exceptions are allowed.

“Considering current oil prices, we can see that the surplus is now reduced,” said Jason Leslie, chief operating officer of the Alberta Chamber of Commerce.

“We have to plan carefully. We are way off target.”

Oil prices are below budget for March, but currency fluctuations and lower-than-budget price discounts for West Canadian Select fuel oil offset the drop in oil prices.

With WTI oil prices averaging in the mid-$70s a barrel and oil price discounts narrow, “I think our earnings line is fine,” Tows said. He finished second to Smith in last year’s UCP leadership race, but that wasn’t the case. He ran for provincial elections last month.

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However, the difference between the budget surplus and the deficit is not so large.

“The line is not incredibly thick. We have set up a $1.5 billion contingency to provide a little buffer, as well as to deal with unexpected expenses,” said Grand Prairie Wapiti. The one-term MLA said.

“If WTI prices continue to stagnate around $70 or fall further, if we have to fight bushfires at the pace we’ve been fighting them all summer, and if we have higher than average crop insurance, If so, the incoming administration may have to make difficult decisions to balance the budget.”

That’s why it’s important for the incoming finance minister to focus on things he can control, such as cost discipline and investment-competitive positioning of states, said Touse, who doesn’t expect a further career in politics. Stated.

And be prepared to say no, even if things improve, he added.

“It is the job of a minister to balance the budget and manage it responsibly from a financial standpoint, and that is the job of the finance minister.”

Chris Varcoe is a columnist for the Calgary Herald.

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