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News Release
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Finance Minister
releases fiscal and economic update in response to global economic slowdown
Alberta government takes corrective action in aftermath
of September 11
RED DEER, October 18, 2001 - Embargoed until
12:15 p.m. - The Alberta government has released details of corrective actions
it is taking in response to the global economic slowdown, accelerated by the
September 11 terrorist attacks on the United States.
"This is a managed approach in response to a
rapid global economic slowdown," said Minister of Finance Patricia Nelson.
"This government is committed to maintaining the balance between fiscal
responsibility and meeting Albertans' priorities, which means taking a realistic
look at the current economic situation around the world and making adjustments
sooner rather than later."
Nelson released a fiscal and economic update that
showed government revenues were expected to be down $1.7 billion this fiscal
year from Budget 2001's forecast, as a result of lower natural gas prices and
investment income. As well, the report provided a breakdown of total government
savings from corrective measures announced by Premier Ralph Klein on September
27:
- 1 per cent
reduction in base ministry spending |
$
160 million |
- Lapses of
2001-02 electricity/natural gas rebates |
$
285 million |
- Additional
department lapses |
$
80 million |
- Capital project
deferrals |
$
735 million |
Total government savings |
$1.26
billion |
"It was imperative to report back to
Albertans with this fiscal and economic update, so they could be assured the
province's fiscal framework was strong, and that through our corrective actions
the budget remains balanced and there were no tax hikes," said Nelson.
"Even with the impacts of September 11, Alberta's economy continues to lead
the rest of Canada and is in the best position to respond to the global economic
slowdown."
Alberta's economic growth is expected to double
the rest of Canada at 4.9 per cent for 2001 - slightly higher than projected in
Budget 2001 - and overall investment is projected to rise by 14.2 per cent, the
fastest in Canada. As well, more than 40,000 new jobs are expected to be created
in Alberta this year, the most in the country.
The Minister of Finance also released a revised
fiscal outlook, which included the following:
![](/web/20061208013754im_/http://www.finance.gov.ab.ca/whatsnew/newsrel/2001/n011018_table.gif)
"The economic situation we're looking at is
still very positive. But, with the impacts of the global slowdown on revenues,
it has taken some deliberate actions on our part to ensure the right decisions
for the future. Being prudent and realistic are important for consumer and
investor confidence - key factors in a vibrant economy," added Nelson.
"Our government will continue to monitor ongoing developments around the
world and take further appropriate action, if necessary."
The Minister of Finance also indicated she will
be releasing the provincial government's Second Quarter Fiscal Update for the
2001-02 fiscal year by the end of November.
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Attachments:
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Backgrounder:
Thursday, October 18, 2001 - Spending reductions, by ministry
Click
here for pdf version of spending reductions.
Following are details of spending reductions in
ministries across government. Savings will come primarily from administrative
reductions, the recently announced hiring freeze and some project deferrals.
Aboriginal Affairs and Northern Development
- targets will be met by reductions in all areas
of discretionary spending
- For information, contact Peter Tadman (780)
415-0876
Agriculture, Food and Rural Development
- reductions will not affect programs and
services provided to Albertans;
- targets will be met through:
- savings from unfilled staff vacancies and reduced contract, travel and
other discretionary spending, and reductions in unallocated grant funds for
the Alberta Environmentally Sustainable Agriculture Council, Agriculture
Initiatives and varied other grant programs
- lapsed funding from Agriculture Financial Services Corporation through
deferred capital projects, unfilled staff vacancies and reduced
discretionary spending
- reduced operating expenses from Alberta Opportunity Company through
decreased discretionary spending and savings resulting from unfilled staff
vacancies
- For information, contact Terry Willock
(780) 422-7683
Children's Services
- target to be met through a hiring freeze,
putting information technology updates on hold and curtailing travel
- a review of spending has identified
administrative efficiencies and contracts with private service agencies will
also be reviewed - any reductions will respect legislative and policy
commitments and maintain critical front line child protection services for
children and youth at risk
- For information, contact Mark Kastner (780)
427-4801
Community Development
- targets will be met with minimal impact to
direct services to Albertans
- funding levels for ongoing annual operating
grants will not be affected
- For information, contact Kathy Telfer (780)
427-2395
Economic Development
- spending reduction targets to be met from
deferral of international travel and from other sources
- reductions will
not affect dollars targeted for tourism promotion; funding has been
reallocated within tourism budgets to increase domestic and in-province
promotion in light of reduced international travel
- For information, contact Mark Erdman (780)
427-0528
Energy
- targets will be met by adhering to the
government hiring freeze and reducing discretionary spending to minimize
impacts on program areas
- For information, contact Charlotte Moran
(780) 422-3667
Environment
- reduction target to be met by:
- not filling vacant staff positions
- reducing the total amount of grant funding available to municipalities
under the Water Management and Erosion Control (AWMEC) and the Waste
Management Assistance programs, applicable only to unallocated funding
remaining in both programs as all current projects have already received
funding approvals and will not be affected by the reductions
- For information, contact Val Mellesmoen
(780) 427-2848
Executive Council
- targets to be met through various reductions
in discretionary spending
- For information, contact Fay Orr (780)
427-4350
Finance
- targets to be met through unfilled staffing
vacancies and reductions in discretionary spending
- For information, contact Ed Greenberg (780)
427-5364
Gaming
- targets to be met through minimal reductions
to Alberta Gaming & Liquor Commission's operating costs; the Racing
Industry Renewal Initiative; the Community Facilities Enhancement Program;
Community Lottery Board grants; the Alberta Lottery Fund support services
and program administration; and other lottery initiatives.
- Community Lottery Boards and the Community
Facility Enhancement Program will continue to spend over $73 million this
fiscal year and provide funding to over 4,000 community-based initiatives
- For information, contact Jody Korchinski
(780) 447-8741
Government Services
- Reduction targets to be met through savings
from unfilled staff vacancies and deferring enhancements to technology used
by registry services
- deferrals will not affect Albertans who are
buying a vehicle, recording the birth of a child, or accessing any of the
other registry services offered by the ministry
- For information, contact Shannon Larkins
(780) 422-4950
Health and Wellness
Human Resources and Employment
- targets will be met with no reductions to
benefit levels for clients who rely on financial and training support from
Assured Income for the Severely Handicapped, Supports for Independence, or
the Skills Development Program
- reductions to come from lapsed spending due to
lower than projected demand for training supports, Supports for
Independence, and employment and training initiatives, due to high
employment levels · Human Resources and Employment and the Personnel
Administration Office to defer some information technology projects and save
on salary costs of unfilled staffing positions
- For information, contact Laurie Collins
(780) 427-5649
Infrastructure
Innovation and Science
- targets will be met through selected one-time
reductions in research activity and a freeze on hiring for the balance of
the fiscal year
- For information, contact Glenn Guenther
(780) 415-4761
International and Intergovernmental Relations
- budget reductions will come from areas of
discretionary spending, including travel, training, intern program and
contracts
- no program spending or service levels will be
cut due to spending reductions
- For information, contact Beryl Cullum (780)
422-2465
Justice and Attorney General
- spending reductions will be drawn from the
Motor Vehicle Accident Claim Fund, expected to be available as one-time
savings based on projected spending patterns for the remainder of 2001-02 ·
reductions are not expected to affect services to Albertans or staff members
who administer the fund
- For information, contact Bart Johnson (780)
427-6154
Learning
Municipal Affairs
- saving targets to be met through unfilled
staff vacancies, reductions in supply and services, travel, contracting,
Information Technology, and a reduction of the amount required to pay to the
grants in place of taxes program
- a portion of the budget targeted to the
Underground Petroleum Storage Tank Remediation Program, which has provided
funding for the assessment and/or remediation of more than 500 high-risk
sites, will be deferred - the ministry will continue working on lower-risk
categories
- For information, contact Jay O'Neill (780)
422-8817
Revenue
- targets will be met by delaying non-critical
development and upgrades to tax administration data processing systems,
freezing non-essential hiring and freezing and/or delaying non-priority
service contracts
- For information, contact Gordon Vincent
(780) 427-5364
Seniors
- targets to be met with no affect on critical
support programs to seniors and those lower income families and individuals
receiving shelter support
- For information, contact Jan Berkowski
(780) 427-2201
Solicitor General
Sustainable Resource Development
- reduction targets to be achieved by leaving
vacant positions unfilled
- ministry staff will be able to work around any
job vacancies to ensure the long-term security of Alberta's forests, fish,
wildlife and public lands
- For information, contact Donna Babchishin
(780) 427-8122
Transportation
![](/web/20061208013754im_/http://www.finance.gov.ab.ca/images/nav_backtotop.gif)
Backgrounder:
Fiscal and Economic Update Charts
Click
here for pdf version of charts.
![](/web/20061208013754im_/http://www.finance.gov.ab.ca/whatsnew/newsrel/2001/n011018_economicchart01.gif)
![](/web/20061208013754im_/http://www.finance.gov.ab.ca/whatsnew/newsrel/2001/n011018_economicchart02.gif)
![](/web/20061208013754im_/http://www.finance.gov.ab.ca/whatsnew/newsrel/2001/n011018_economicchart03.gif)
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For media enquiries, please contact:
Ed Greenberg
Alberta Finance Communications
(780) 427-5364
Cell: (780) 718-5699
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