Alberta’s fiscal situation Budget 2015 and beyond

What We Heard Public consultations December 2014-March 2015

Executive Summary In the fall and winter of 2014, world oil prices began a dramatic and unforeseen collapse from a value of $105/barrel to below $50/barrel. This has had a dramatic impact on revenues for the Government of Alberta, creating a forecasted $7 billion revenue loss for the 2015-16 fiscal year.

Without direct changes in government operations, it is forecast Alberta could face a multi-billion dollar deficit in the coming years. In the lead up to work on Budget 2015, government consulted with Albertans in several ways to solicit suggestions for how to address the new fiscal reality.

The Government of Alberta held numerous forms of public consultation in advance of the 2015-16 provincial budget. These included open consultations with major economists and a speaking tour with 26 stops across Alberta. As well, government MLAs held open houses in some constituencies and an online survey drew wide-ranging interest from Albertans. Below is a summary of some of these consultations.

Online survey The online survey was accessible at government’s main budget website (budget.alberta.ca) and was conducted from February 5-28. It was a voluntary survey and included both multiple choice questions and the opportunity for written input from participants. The survey was conducted as government was actively speaking about the $7 billion revenue gap for Budget 2015 due to declining oil prices. This public narrative sparked tremendous interest in the survey. Promotion of the survey was done through existing media channels, including a news conference with Minister Robin Campbell on February 5 as well as extensively through government social media channels. As well, multiple stakeholders and individual Albertans promoted taking the survey through their own social media accounts.

In total, 40,513 responses were received, up significantly from the 2,173 responses received for an online survey conducted for Budget 2014.

From February 5-28, the budget.alberta.ca site recorded 102,600 page views. The highest number of page views on February 5 with 22,551 page views—the day the survey was launched. Extensive pre-budget information was available to Albertans on this website.

Participation in the survey was voluntary. As respondents were not selected randomly, the resulting ‘self-selected’ respondent populations can be considered representative of ‘interested Albertans’ but may not be representative of the entire Alberta population. Please note that summaries of open-ended questions represent a general indication of the impressions and preferences of survey respondents, and should not be taken as representative of survey respondents who did not comment.

The survey was conducted in-house with no external costs.

Speaking Tour Starting on January 13 and continuing to March 9, several cabinet ministers and the Premier made 26 stops on a speaking tour that included small communities such as Peace River, Grande Cache and Athabasca, smaller regional centres such as Grande Prairie, Medicine Hat and Lloydminster as well as Edmonton and Calgary.

Roughly 2,000 people attended the various speaking engagements as a part of the formal tour. A speech given in Medicine Hat by Minister Campbell, was recorded and the video posted on budget.alberta.ca for any Albertans interested and unable to attend one of the speaking engagements. Each event allowed for questions from the audience and subjects ranged widely from local concerns in each community to larger provincial issues. Getting off the roller coaster of oil prices and economic diversification were consistent comments heard during the formal speaking tour.

The majority of the speaking engagements were hosted by local Chambers of Commerce or service clubs and there was no direct cost to government for these speaking engagements beyond the cost of transportation to each community. Local media were invited to attend and were given the opportunity to discuss the budget and comments heard at the events.

Direct Consultations On December 4, Minister Campbell met with economic experts from Canadian financial institutions to discuss Alberta’s economic forecasts leading up to Budget 2015.

Video recordings of the consultations were posted publically online and had several hundred viewings as of the beginning of March.

Additionally, Minister Campbell and other ministers met directly with municipalities, school boards, universities and other large stakeholders to discuss the provincial budget and Alberta’s fiscal situation.

#ABbudget

Budget 2015 Online Consultation Survey Report as of closing date: February 28, 2015

Number of responses: 40,513

Table of Contents

This report lists the questions in the survey and displays a chart and summary table for each question. * Indicates text input question. Results have not been included in this report.

Contents ..................................................................................................... Page

Definitions – Survey Response Tables ............................................................... 3

Questions .......................................................................................................... 4

1. To what extent do you think low oil prices impact the Alberta government's ability to budget? .... 4

2. The provincial government is projecting a shortfall of $7 billion or a 15 per cent reduction in revenue next year. How concerned are you about that shortfall? ................................................... 5

3. Some people think the current economic situation is a normal cyclical event that Alberta should ride out. Others think that the current economic situation is an urgent matter that the Alberta government must quickly respond to. To ensure the long-term prosperity and sustainability of the province, do you think the government should take action now, wait six months to see where the economy is going, or hold out until high oil prices return? ............................................. 6

4. Some people think that the Alberta government needs stable sources of revenue so that oil price fluctuations don’t have as much impact on the provincial budget. Other people think the government has sufficient revenue and needs to better manage its spending. Which of these is closer to your own opinion? .............................................................................................................. 7

5. The Alberta government is forecasting up to a $7 billion revenue shortfall for the coming year due to the recent drop in the price of oil. The government has said its first priority is to make cuts at the top to lead by example and to look for efficiencies, but experts say that is unlikely to be enough to solve the problem. How acceptable do you think it is for the government to … .............................................................. 8

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6. Government has choices about how to respond to the shortfall in revenue. What is the right balance? ............................................................................................................................................. 9

7. Compared to other provinces, would you say current tax rates in Alberta are higher, about average, or lower? ........................................................................................................................... 10

8. How important is it that Alberta's tax rates are lower than other provinces? ................................ 11

9. In what ways can the government act to increase and/or stabilize its revenues without jeopardizing Alberta’s competitive position? .................................................................................. 12

10. If the government needs to increase its revenues through taxation, are there options you feel should NOT be considered? ............................................................................................................. 14

11. Alberta per capita spending is roughly $1200 above the national average. If the government needs to cut spending, are there certain programs or services where you would tolerate cuts? ... 15

12. And are there options you feel should NOT be touched? ............................................................... 17

13. With regard to the following statements, please indicate whether you agree, disagree or don't know … .............................................................................................................................................. 19

14. * If we missed something, please take a moment to provide additional comments.

15. How many years have you lived in Alberta? .................................................................................... 21

16. What part of the province do you live in? ...................................................................................... 22

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Definitions – Survey Response Tables

For questions that allowed only one response (Questions 1 to 4, 7 to 8 and 15 and 16):

• Absolute Frequency column: The number of times this choice was selected. The sum of this column is the total number of respondents (40,513).

• Relative Frequency Percentage column: How much this choice was selected, relative to the other choices for the question, as percentage. The sum of this column is 100% of respondents.

For Question 6 (required a percentage for each of three options):

• The average of percentages chosen by respondents is shown in the chart and in the table.

For questions that required one response for each of several options (Questions 5 and 13):

• The options are shown in rows, and the responses for each are shown in the cells for that row.

• The first number in the cell is the number of times this choice was selected.

• The second number in the cell is how much this choice was selected, relative to the other options for that row, as percentage.

• The sum of each row is the total number of respondents (40,513); and the percentages total 100%.

For questions that allowed more than one response (Questions 9, 10, 11 and 12):

• Absolute Frequency column: The number of times this choice was selected. The sum of this column is more than the total number of respondents (40,513), because more than one choice was allowed.

• Relative Frequency Percentage column: The percentage of the total number of respondents (40,513) who selected this option. There is no sum for this column, because more than one choice was allowed. Percentages will not add up to 100%.

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Question 1

To what extent do you think low oil prices impact the Alberta government's ability to budget?

RESPONSES CHART:

RESPONSES TABLE:

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Question 2

The provincial government is projecting a shortfall of $7 billion or a 15 per cent reduction in revenue next year. How concerned are you about that shortfall?

RESPONSES CHART:

RESPONSES TABLE:

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Question 3

Some people think the current economic situation is a normal cyclical event that Alberta should ride out. Others think that the current economic situation is an urgent matter that the Alberta government must quickly respond to. To ensure the long-term prosperity and sustainability of the province, do you think the government should take action now, wait six months to see where the economy is going, or hold out until high oil prices return?

RESPONSES CHART:

RESPONSES TABLE:

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Question 4

Some people think that the Alberta government needs stable sources of revenue so that oil price fluctuations don’t have as much impact on the provincial budget. Other people think the government has sufficient revenue and needs to better manage its spending. Which of these is closer to your own opinion?

RESPONSES CHART:

RESPONSES TABLE:

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Question 5

The Alberta government is forecasting up to a $7 billion revenue shortfall for the coming year due to the recent drop in the price of oil. The government has said its first priority is to make cuts at the top to lead by example and to look for efficiencies, but experts say that is unlikely to be enough to solve the problem. How acceptable do you think it is for the government to …

(Choose one option for each row.)

RESPONSES CHART:

RESPONSES TABLE:

Sequence of numbers in cells is as follows: ROWS: Absolute Frequency (number); and Relative Frequency (%)

Options Not at all acceptable

Not very acceptable

Somewhat acceptable

Very acceptable

Sum

a) Cut spending on programs and services, including healthcare and education, in order to balance the budget.

25235 62.29%

6815 16.82%

4924 12.15%

3539 8.74%

40513 100%

b) Raise taxes and user fees to reduce reliance on oil revenues in order to balance the budget.

9437 23.29%

7308 18.04%

13691 33.79%

10077 24.87%

40513 100%

c) Borrow money to cover the current shortfall in revenues while we wait for oil prices to rebound.

8866 21.88%

10392 25.65%

15870 39.17%

5385 13.29%

40513 100%

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Question 6

Government has choices about how to respond to the shortfall in revenue. What is the right balance? (Respondents allocated a percentage for each option.)

RESPONSES CHART:

RESPONSES TABLE:

Choices

Averages of Percentages chosen by

Respondents a) Reduce expenditures 38.87% b) Raise taxes and user fees 32.28% c) Run a deficit 28.85% Sum: 100%

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Question 7

Compared to other provinces, would you say current tax rates in Alberta are higher, about average, or lower?

RESPONSES CHART:

RESPONSES TABLE:

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Question 8

How important is it that Alberta's tax rates are lower than other provinces?

RESPONSES CHART:

RESPONSES TABLE:

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Question 9

In what ways can the government act to increase and/or stabilize its revenues without jeopardizing Alberta’s competitive position? (Please choose at least one.)

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RESPONSES CHART:

QUESTION 9 RESPONSES TABLE:

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Question 10

If the government needs to increase its revenues through taxation, are there options you feel should NOT be considered? (Please choose at least one.)

RESPONSES CHART:

RESPONSES TABLE:

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Question 11

Alberta per capita spending is roughly $1200 above the national average. If the government needs to cut spending, are there certain programs or services where you would tolerate cuts? (Please choose at least one.)

RESPONSES CHART:

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QUESTION 11 RESPONSES TABLE:

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Question 12

And are there options you feel should NOT be touched? (Please choose as least one option.)

RESPONSES CHART:

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QUESTION 12 RESPONSES TABLE:

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Question 13

With regard to the following statements, please indicate whether you agree, disagree or don't know. (Please choose one response for each row.)

RESPONSES CHART:

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QUESTION 13 RESPONSES TABLE:

Sequence of numbers in cells is as follows: ROWS: Absolute Frequency (number); and Relative Frequency (%)

Options Don’t Know

Disagree Agree Sum

a) I am concerned about the province’s reliance on oil and gas revenue because of its boom and bust cycle and its impact on programs and services.

1196 2.95%

4669 11.52%

34648 85.52%

40513 100%

b) Even if it means fewer services, we should save more of our oil and gas revenue for the future because it is a non-renewable resource.

5784 14.28%

10467 25.84%

24262 59.89%

40513 100%

c) It is wrong for Alberta to rely too heavily on oil and gas revenue because the price is controlled by forces outside of the province.

2144 5.29%

4943 12.2%

33426 82.51%

40513 100%

d) It is okay for government to borrow money for hospitals, roads and schools because future generations will also enjoy them and should share the cost.

5214 12.87%

10225 25.24%

25074 61.89%

40513 100%

e) The government should protect key services from cuts, even if that means running a deficit.

3289 8.12%

6997 17.27%

30227 74.61%

40513 100%

f) The Alberta government should never run a deficit in any circumstances.

6041 14.91%

27999 69.11%

6473 15.98%

40513 100%

Question 14 (Comments)

Please note: Full text input has not been included in this release.

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Question 15

How many years have you lived in Alberta?

RESPONSES CHART:

RESPONSES TABLE:

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Question 16

What part of the province do you live in?

RESPONSES CHART:

RESPONSES TABLE: