02/08/2012 12:26 EST | Updated 04/09/2012 05:12 EDT

Cuts axed: Alberta premier says no deep spending cuts coming in budget

EDMONTON - Alison Redford, set to deliver her first budget as Alberta's premier, promised Wednesday that it won't include deep cuts to balance the bottom line.

She said that despite four-consecutive deficit budgets since 2008, the province can't hack and slash its way out of the red.

"It's just not necessary," Redford told a Calgary open-line radio show.

"We can accomplish what we need to accomplish by doing the work we need to do around results-based budgeting."

Redford has hinted that Thursday's 2012-13 budget will once again be in the red, but said the government remains on track to have it balanced no later than 2014.

"We'll see some signals in the budget that I think will reflect some confidence in Alberta's economy as we go forward."

On Tuesday, the first day of the final sitting before an election, she tabled legislation to move the government toward zero-based budgeting. That means, the budget would not be tweaked every year, but rather stripped to zero, and each program would be re-examined to ensure goals were being met and spending wasn't off track.

The budget will be presented by Finance Minister Ron Liepert. It is expected to be passed by the Progressive Conservatives by mid-March, with an election call coming shortly thereafter.

Redford dismissed the idea of handing down the budget, calling the election and then, if forming government again, passing the spending plan after that.

Passing the budget will send a clear message to her opponents about her government's intentions, she suggested.

"The thing I don't want this election to be about is ideology with respect to — what would I call them — bogeymen in terms of speculation as to what happens after the election.

"We're going to pass this budget so that every Albertan knows what this government believes the fiscal plan should be."

Danielle Smith, leader of the Wildrose party, said Redford is saddled with a caucus that no longer knows how to manage money and continually falls back on spending heavily, then raising taxes or user fees.

"We've seen record deficits at a time when we had near-record resource revenues," said Smith. "They've clearly lost control over managing the books."

This fiscal year's deficit is on track to hit $3.1 billion, even though the price of oil — Alberta's main economic driver — is pushing US$100 a barrel.

Smith, along with the Alberta Liberals, says government spending approaching $40 billion annually is enough. The two parties say the Tories are wasting billions through pet projects such as carbon capture and storage and by refusing to trim a civil service bloated with senior and mid-level managers.

Smith said further evidence that the Tories are out of ideas came Tuesday in the throne speech, which outlined plans to review income tax rates and other revenue sources.

Redford said a review of the 10 per cent flat tax doesn't mean an increase.

Smith said her party would not raise rates at all.

NDP leader Brian Mason, however, applauded the move to review the rates. He said the Tories put themselves behind the eight-ball in the first place.

"This government slashed corporate taxes from 16 to 10 per cent. This government imposed a flat tax that benefited the wealthiest people," said Mason.

"They gave up billions of dollars in annual revenues, so now we have a deficit."

Liberal Leader Raj Sherman said if his party were elected, it would raise taxes, but only on large corporations and the wealthiest 10 per cent of Albertans.

The extra money, along with government cost savings, would amply fund endowment funds to deliver free tuition for post-secondary students and significantly reduce wait times for emergency care and surgery within two years, he said.

Sherman took aim at Redford in question period Wednesday.

"The Alberta government has both a revenue problem and a spending problem," he said. "Will the premier take the next bold step and implement a fair tax formula, so we don't have to sell off pieces of the family farm in order to pay the bills?"

Redford replied that the budget will explain all.