NEWS
08/26/2016 14:40 EDT | Updated 08/27/2017 01:12 EDT

Alberta's Notley says budget plan is working but she'll alter if need be

EDMONTON — Premier Rachel Notley says her government will stick with its economic plan despite a budget deficit of almost $11 billion, but will alter course if necessary.

Notley made the comments Friday as she renewed her attack on the 2015 election platform of former Progressive Conservative premier Jim Prentice.

"The key is to stay in line with the projections that we put in place and the slow reduction of the deficit over time in a responsible way that allows the public service to do what it needs to do," Notley said.

"If we find that we're not able to stick to the careful path that we've laid out, well then obviously we'll reconfigure, we'll recalibrate, we'll change course, but it's going to be careful."

Low oil prices have left Alberta's bottom line in tatters, cutting billions from the revenue side of the ledger.

A fiscal update earlier this week revealed this year's projected Alberta deficit has grown by $500 million to almost $11 billion.

The increase is tied to costs incurred by the spring Fort McMurray wildfire, which displaced more than 80,000 people.

It was a sobering forecast showing GDP has fallen for two consecutive years at levels not seen since the last oil crash of the 1980s. Job losses are in the tens of thousands and unemployment is above eight per cent.

In response to the steep fiscal downturn, Notley's government has laid out a multi-year plan to increase capital spending, and borrow to pay for day-to-day operating expenses while avoiding cuts to front-line staff and services.

Alberta is now on track to top $30 billion in debt this year and will rack up $58 billion by 2019.

Opposition and some industry critics say Notley's government is making a bad situation worse by also hiking corporate taxes, increasing the minimum wage and bringing in a wide-ranging carbon tax.

This week, Notley defended her budget by contrasting it with the one Prentice never passed but campaigned on in the spring election of 2015. In a speech to union members in Ottawa on Wednesday, Notley said the Prentice campaign plan would have led to catastrophic hardship.

On Friday, Notley continued the attack. She said proposed Tory election cuts to health care would have stalled critical initiatives, and added: "We're not going to help the economy by firing tens of thousands of public servants, doctors, nurses, care aides (and) teachers aides."

She dismissed suggestions she was deflecting from the deficit by shadow boxing against a phantom PC campaign budget. The government must remain vigilant against current demands for deep cuts that ignore social consequences, she said.

"Because that (austerity) argument continues to be made, it is important that we respond to it."

The PCs says the Prentice plan was to reduce health spending by $1 billion through savings without affecting front-line services. They say claiming their plan was or would have led to "tens of thousands of job losses" is false.

PC Leader Ric McIver said Notley is simply looking for a "straw man" because "she does not want to talk about the incompetence of her budget, the incredible fiscal irresponsibility of the deficit and debt that she's driving Alberta into."