Stakeholders, economists react to Alberta’s fiscal focus on Heritage Fund

The plan to reinvest in the Heritage Savings Trust Fund was met with mixed reviews the week before the new annual budget.

Premier Danielle Smith’s Wednesday evening address announcing a plan to begin reinvesting in the Heritage Savings Trust Fund and keeping provincial spending below the inflation and population growth was met with mixed reviews the week before the new annual budget.

“The message of fiscal prudence was probably well received. The problem is that it’s going to come at the expense of promised (personal income) tax cuts,” Mount Royal University political scientist Lori Williams said.

Smith and the UCP made cutting the lowest personal income tax rate to eight per cent for the first $60,000 of income a prominent plank in their spring election platform.

“I think a lot of people are having a bit of buyer’s remorse or maybe even feeling a sense of betrayal,” Williams said.

In an interview with Global News on Thursday, Smith was asked about what she would say to Albertans who may have been counting on the nearly $1500 per family to help during inflationary times.

“I think people know during an election campaign that you put forward a number of promises and you intend to achieve them before the next election,” the premier said. “So we wanted to make sure that our number one promise was kept, which is that we don’t go into deficit budgeting.”

In her televised address, Smith said the goal of building the Heritage Fund to $400 billion by 2050 and creating a self-sustaining source of government revenue was to get the province off the so-called resource revenue rollercoaster.

For decades, Alberta has tied budget spending to the mercurial ups and downs of oil and gas prices, leading to years of eye-popping multibillion-dollar surpluses set against equally alarming deficits.