CALGARY - Alberta's finance minister says plummeting oil revenue means the next Alberta budget isn't going to be pretty, but the province isn't ready to consider raising taxes — yet.
"This is not going to be a fun budget. This is going to be a budget that will show that we are serious about reining in spending," Doug Horner told a Calgary business audience on Monday.
In the medium term, he said, there's still the opportunity to trim spending and work to make sure government services are being delivered in the most efficient way possible.
"And then you can probably have a discussion about whether or not we have the right mix of taxation to accomplish the job, but that's a little ways out yet."
The "tough" 2013 budget, which Horner is set to deliver on March 7, will explore "different ways of doing things" and "belt-tightening," but no new taxes to shore up the revenue side, he said.
"The first thing that we do is we look to our own house before we dig into the pockets of those in your house," Horner told reporters.
That echoes a commitment Premier Alison Redford made earlier this year.
But Horner said there are serious structural issues with the province's finances.
Alberta's coffers are being hit hard by the steep discount oilsands producers are getting for their crude versus other varieties. Alberta's limited access to markets means its bitumen is fetching about $40 a barrel less than West Texas Intermediate, a benchmark for landlocked U.S. light crude.
The price gap widens to $50 when Alberta crude is compared to international benchmarks that can access the most lucrative markets by sea.
A number of pipeline proposals to the east, south and west are in the works to expand market access for Canadian crude, but that won't fix the situation in the near term.
Horner says the province has been through tough times before, but this time it's different.
"Alberta has long been well-positioned to weather economic storms. We came through the 2008 recession better than most other jurisdictions," Horner said in his speech.
"We're accustomed to the ups and downs of resource prices and we're used to the boom and bust. But this is not your average storm. This is a structural change in our key commodity and we must do more than wait for the storm to clear, and we are."
The provincial government held budget consultations in the fall with more than 6,000 Albertans.
In a report Monday, the province says Albertans want the province to save in good times and bad and to diversify the economy away from oil and gas. Respondents to the survey were also open to the government borrowing money to pay for infrastructure, so long as it's in a responsible way.
Alberta doesn't have a provincial sales tax and adopting one has been discussed by pundits as Alberta looks to cut its deficit, forecast for this fiscal year is between $2.3 billion and $3 billion.
In order to introduce a sales tax to Alberta, however, there's a law on the books that requires a referendum and changing that rule is "not on the table for me to do," Horner said.
Rob Anderson, finance critic of the Opposition Wildrose party, said the survey is meant to justify the Progressive Conservative government's "reckless fiscal agenda."
"Redford did not campaign on running billion-dollar deficits and picking up debt for future generations to pay for through higher taxes because it does not reflect the priorities of Albertans," Anderson said.
"Albertans want government to live within its means and prioritize spending on needs versus wants, something this government just doesn't understand."
Horner told reporters that numbers are still being crunched, but balancing the budget will be a challenge.
"Is it going to be really, really tough to do? Absolutely. The longer the situation persists, the harder that's going to be."
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Here's a breakdown of how the Alberta government parceled out spending last year. Information provided is <a href="http://finance.alberta.ca/business/budget/2012-13-Expense-by-Function.pdf">Expense by Function estimates</a> provided by the Alberta government.
7.1 per cent of the budget went to General Government - Includes a broad range of additional services including funding for parks and recreation, cultural activities, housing initiatives, economic development, costs to run government and debt servicing expenses (interest payments).
1 per cent of the budget went to Environmental funding - Provides for environmental monitoring and protection, including pollution control, water supply management, air quality control, garbage collection and waste disposal and a host of other environmental programs and initiatives.
Regional Planning and Development
2.7 per cent of the budget went to Regional Planning and Development - Includes amounts for planning and regional development and a portion of the grants made directly to municipalities, including the Municipal Sustainability Initiative.
Protections of Persons and Property
3.9 per cent of the budget went to Protections of Persons and Property - Includes amounts for the protection of persons and property, including amounts for policing and security, the provincial court system, correctional and rehabilitation services, firefighting, labour relations and a host of other regulatory measures.
Transportation, Communications and Utilities
4. 6 per cent of the budget went to Transportation, Communications and Utilities - Includes amounts related to road, rail and air transport and maintenance, public transit grants, as well as pipelines, utilities and telecommunications networks.
Agriculture, Resource Management and Economic Development
5.4 per cent of the budget went to Agriculture, Resource Management and Economic Development - Includes amounts for farming support programs, food supply quality monitoring and protection, weed and pest control, crop insurance programs, natural resource management, economic and rural development, irrigation and veterinary care.
11.5 of the budget went to Social Services - Includes social assistance (e.g. AISH), pension benefits, and care for children, seniors and other vulnerable Albertans.
22.9 per cent of the budget went to Education - Includes Early Childhood Services to Grade 12, as well as post-secondary education, skills training and the construction and maintenance of educational facilities.
40.9 per cent of the budget went to Health - Consists of expenses incurred to ensure necessary health services are available to Albertans and includes funding for hospitals, medical and preventative care and the construction and maintenance of provincial health facilities.