Alberta Premier Rachel Notley defended her government’s budget today in Edmonton, but negative reactions are mounting against the NDP’s self-titled “Alberta Jobs Plan.”
Credit rating agency DBRS announced Friday that they would be downgrading Alberta’s credit rating to “AA” from “AAA.” The group cited the province’s reluctance to either rein in spending or increase taxation, saying the government’s spending plans would push debt levels higher than can be justified for a triple-A rating.
Moody’s at the same time chose to maintain Alberta’s “AAA” rating, but noted that the government’s weakening fiscal circumstances would put further pressure on that rating. Standard and Poor’s lowered the province’s rating to “AA+” in December.
“We were expecting that,” said Premier Notley, answering questions after a Chamber of Commerce ‘State of the Province’ address. “Every major energy-producing jurisdiction in the world has been dealing with credit rating reductions, as have energy-producing companies.”
Notley’s speech in front of the Chamber of Commerce did very little to quell criticism of her government’s carbon levy. During her speech and in the press availability that followed, the premier touted the small business tax cut from 3% to 2% as a rebate for the increased costs those businesses will incur.
“Any tax decrease is welcomed,” said Bryce Kumka, president of the Fort McMurray Chamber of Commerce. “But this one’s offset by a huge downside.
“The significant increase in costs for businesses and Albertans will greatly outweigh [the benefits]. Heating our homes, heating our businesses, driving our cars, there just doesn’t seem to be a whole lot of offset for that.”
The government will be providing a personal rebate for low- and middle-income Albertans to help offset the costs of the carbon levy. Individuals earning less than $51,000 can receive up to $200 in 2017 and $300 in 2018, while couples earning less than $100,000 can receive up to $360 and $540 in the same time periods.
Notley argued on Friday that if Albertans change their habits when it comes to energy consumption, the rebates will be extra money in their pockets.
“They can change their behaviour,” she said. “That’s the point of it.”
Kumka said the notion that businesses can change their behaviour is a “flight of fantasy,” especially in a remote region like Fort McMurray.
“The majority of goods transported to our community come by truck,” he said. “We don’t see a lot of rail transportation that takes place, because we don’t have a lot of robust rail infrastructure.”
The ACC did note some “glimmer of opportunity” measures in the budget. The Capital Investment Tax Credit is set to provide $75 million over two years to businesses that acquire new or used property for the first time, while the Alberta Investor Tax Credit will provide incentives for investors to provide capital funding for the province’s businesses. The ACC was cautious in praising both, saying of the Investor Tax Credit that it’s “predicated on an assumption that businesses will be attractive to invest in.”