In a speech this week, Spruce Grove-St. Albert MLA Doug Horner gave some broad hints at what future challenges for the province may look like, but overall promised blue skies for Alberta's economy in coming years.
Horner spoke at the St. Albert and District Chamber of Commerce's monthly luncheon on Wednesday. He said Alberta continues to be the best place in North America, if not the world, in terms of economic stability and quality of life.
"Lowest taxes in North America, strongest economy in North America, highest growth in Canada double the national average, triple the population growth of the country," he said. "One-hundred-forty thousand people came here from other jurisdictions (this year) because this is the best place to be in North America."
Horner said he recently spent much time travelling across the province to meet with members of local chambers and the public to talk about challenges for the coming year.
He said he heard a strong message from the people about investing into the province's growth, building more infrastructure and managing the volume of people entering the province.
"We passed four million people in our province this year, that's almost as big as British Columbia," he said, adding that last year alone almost 140,000 people moved to Alberta.
Future growth
In about 15 to 20 years, Horner said the province is estimated to grow to almost six million people, equaling about two more Calgarys. Those numbers not only call for changes in infrastructure and spending, but also for a need for pension reform, he said.
Horner said the province will have to make changes to its retirement plan but will not get rid of early retirement, nor remove its benefit plan. In the future, it will, however, stop subsidizing early retirement and remove its 35-year limit on payments into the pension fund, he said.
"You have fewer numbers of contributors paying into the fund and you have the growing number of retirees," he said. "We have a lot of people that will live a lot longer than we thought we would when we designed the plan."
When he consulted with local chambers last year, Horner said he was told the government needed to live within its means, save money and build more infrastructure.
Today, the province has about $20 billion in savings, and an expected $30 billion once it finishes its three-year business plan.
Some of the government's saving plans this year included freezing expenditures at a zero percent increase and committing to result-based budgeting, setting money aside before deciding how to spend it and towards debt repayments, he said.
The government also set a gap on their borrowing based on changes in interest rates, he said.
"So if interest rates start to rise our borrowing limit goes down," he said. "Because we are in a financial position where we can afford to make the right financial choice."
He added that about 100 projects are now designed or in the ground, which includes finishing the northeastern part of the Anthony Henday and the twinning of Highway 63 going to Fort McMurray.
Future challenges
In the coming year, Horner said the province would have to focus on bringing its oil to the market. Last year, he said Albertans were losing about $50 a barrel on 2 million barrels a day – adding up to about $100,000 a day.
"The grand price of oil is probably around $107 a barrel. The price that Alberta gets today is $58," he said. "So when we talk about market access, that's what it's all about."
Another challenge is relieving the damage of the spring flood in southern Alberta.
Horner said the flood was the largest economic disaster the country has ever seen. It cost Albertans about $6 billion, with the federal government expected to repay between $3 to $4 billion.
Despite the hit the economy took from the flood, he said the Alberta government did not take money out of its Heritage Trust Fund to pay for the expenses. That fund holds about $15 billion and is primarily used for medical and technological research, scholarship funding and to match public donations.
"Today, as we stand here today you have about $20 billion in savings," he said. "The question we need to start talking about is what are we saving it for, how we can utilize it better and you will hear a lot of discussion from us."
