Blaming volatile energy prices and economic uncertainty following the U.S. terrorist attacks, the Alberta government has put a freeze on all new hiring and discretionary spending as well as delaying some capital projects.
Premier Ralph Klein says departments have been asked to reduce spending by one per cent this fiscal year, and the government will no longer spend targeted reserves in the budget like the $300 million set aside for electricity and natural gas rebates.
The freeze is one of several steps in a government effort to cut $1 billion from the budget. The projects affected will be announced in the coming weeks, and more details will be unveiled in a mid-October report on revenue forecasts.
“Since Sept. 11, there have been sharp drops in oil and natural gas prices, drops that would affect Alberta’s bottom line if the government doesn’t act now,” Klein said last week.
“It would be foolish for any government to not be prepared to deal with the caution and unpredictability the global economy is facing,” he added, noting the government does not plan to move into a deficit situation or raise income taxes.
But the head of Alberta’s largest union says in light of settlements received by doctors, nurses and management, there should be money for a fair wage increase for workers.
“There may be fluctuations, but we still think that this is the best time to be bargaining, and the best province to be bargaining in,” said Dan MacLennan, president of the Alberta Union of Provincial Employees.
“It’s one thing for capital projects to go on hold . . . but these folks went through the cuts, and these times are much better than those times are. I’m heading into the negotiations still looking for a positive outcome.”
The AUPE is bargaining with the provincial government for a new master contract and subsidiary contracts for direct provincial employees. Of approximately 45,500 members represented by AUPE, about 18,000 are directly employed by the provincial government.
Klein also said economic growth is still on track to exceed the national average this year and that any recession will be “felt far less in Alberta than in other parts of Canada and the world.”
