There are a number of interesting things in the following memo to the Priorities Committee of Cabinet taken from the Hyndman papers. It is March 1981 and there is enormous uncertainty which the Lougheed government has not been accustomed to. A global recession going on and the National Energy Program has thrown the Lougheed government curves never faced before including higher levels of unemployment. This was a government that had enjoyed the spoils of office for nearly a decade and those spoils are under assault from outside forces over which it has no control. The response of the federal government (“Ottawa government” or “Trudeau government”) has chosen to protect the interests of the consuming provinces- the most populous provinces of Ontario (over 100 seats) and Quebec (75 seats).
As this document underlines, Alberta politicians were particularly concerned with emphasizing the capacity of the economy (government) to spur employment growth. In addition, like the Kenney government and predecessor governments, Alberta was especially keen to emphasize all the good jobs created by the Alberta oil patch (Alberta/government).
In this memo the reference to the Heritage Fund is the first reference I have found to the possibility of limiting transfers to the Heritage Fund.
The other interesting element was the bureaucratic language used- specific reference to documents, reports, committees, and documents. There was a necessary precision to recording these decisions and great formality.
PRIORITIES COMMITTEE BUDGET REVIEW MEETINGS (1981-82)
DATE: Monday, March 2, 1981
TIME: 2:00 p.m. – 5:30 p.m.
PLACE: Council Chambers
NOTE: The following notes have been compiled jointly by Treasury (Budget Bureau) and Executive Council
- GLOBAL BUDGET REVIEW
Economic Strategy for the Budget (Hyndman)
After discussion of the Treasury document entitled General Revenue Fund Medium-Term Outlook, the Committee requested the Provincial Treasurer to provide, for a meeting in early May, 1981 the following additional information:
-anticipated growth levels for Alberta Heritage Savings Trust Fund for the first five years of the 1980’s including figures indicating possible decreases in transfers to AHSTF needed to be legislated to maintain balanced budgets for that period;
-estimated capital for borrowings by the largest of Alberta Crown Corporations and Treasury’s assessment of the level of these borrowings which may be funded from private capital markets;
– number of barrels of oil left in the ground in 1980-81, to 1982; and if 100,000 barrels per day were to be produced from March 1982 onwards, what revenue could be expected. Highlight in our accounting the value of shut-an oil production;
– prepare a series of alternatives of longer-term fiscal plans taking into account the above items.
- Updated Economic Overview and Outlook
Reviewed. The Committee requested the Provincial Treasurer to prepare a further analysis for the Committee including comments on:
– the decrease in oil and gas activity on Alberta on employment;
– an evaluation of the “window” in economic activity as a result of the federal budget and the National Energy Programme;
– an evaluation of the impact of the delay in the Alsands Project. (Premier’s comment on the Hugh Harries report).
– evaluation of investor confidence in Alberta.
– An explanation of the term ”manufacturing and processing.”
b) Strategy Discussion Paper
After a review of Treasury’s recommendations on the goal for an economic strategy, the Committee AGREED to the following Treasury recommendations that:
– the Government adopt a policy of ensuring that annual employment growth does not fall below 3%; and
– that the Government adopt this minimum rate of employment as its target rather than a target unemployment rate for target rate of growth of real Gross Domestic Product (GDP). Treasury is to place emphasis in future analysis on the growth in employment rather than on growth in real GDP.
– the guidelines contained on pages 8 and 9 under “Characteristics of Capital Projects for a Policy of Fiscal Stimulation” be adopted;
– the Government refrain from a programme of general fiscal stimulus in the forthcoming budget (Page II, “Policy Implementation”).
In addition, the Committee AGREED to delete Whitecourt and Drumheller from the list of communities affected by reduced oil and gas activity (page 9) and to refer instead to the target impact regions surrounding Grand Prairie, Drayton Valley, Rocky Mountain House, Brooks and Cold Lake and Fort McMurray.
c) Draft Section of Budget Speech
Reviewed. The Committee AGREED that the Budget Speech should emphasize the general impact of the National Energy Programme and its impact on the Canadian economy rather than providing too many details of the effects on Alberta.
- 1981-82 Revenue Estimates and Financial Plan (Hyndman)
The Committee AGREED to give further consideration to the following major policy decisions for this budget which could have a significant impact on the province’s overall financial position (page 4): (Numbering below appears follow page 4- a list of policy recommendations)
2, the review of the exploratory drilling and geophysical incentive credits was decided earlier today.
3. the review of utilities subsidies for low-income Albertsons including natural gas rebates and remote area heating allowances.
6. the consideration of special capital expenditure plans to alleviate the impact of the NEP on Alberta’s economy.
With respect to the remaining pending policy decisions, the committee made the following decisions.
1. Corporate tax incentives including those recommended by the Knaak Committee and those being considered to offset the impact of the NEP (revisions to ALPEP) – Delay consideration at this time.
4. RFD P2-81 which seeks over 1 billion for land purchases in 1981- 82 in restricted development areas – premature for this Budget; delay one year.
5. The consideration of royalty deferral schemes to offset the impact of the oil production reduction – premature for this budget.
The Committee AGREED that the Provincial Treasurer issue a Ministerial Statement prior to the Budget Speech outlining the preliminary 1980- 81 expenditure and revenue position of the Province recognizing that the final results will not be available until a later date.
- Acceleration of Capital Projects (Hyndman)
After a review of the document, the Committee AGREED to refer the report to the Economic Planning Committee of Cabinet for its recommendations on:
a) do all projects outlined fully meet the ” suggested criteria”, and
b) submission to Priorities Committee of a priority listing for the projects.
- Cold Lake Budget Matters (Hyndman)
After a review of the report on potential Cold Lake Area projects, the Committee AGREED to refer the list of projects to the Cold Lake Sub-Committee for its review and recommendation on a priority listing for the projects on the following bases (sic):
- definitely proceed
- highly likely to proceed
- possible
- questionable value.
This recommendation should take into account the Government’s commitment during meetings with area officials in December, 1980.
- Inflation Factors for Major Global Funding Grants (Hyndman)
The Committee AGREED to a revised 1981- 82 Treasury Guideline for inflation factors for each of the major global funding grant programmes as follows:
Hospitals and Nursing Homes 11.4%
Schools 12.3%
Universities and colleges 13.1%
Local Health Units 10.7%
- Alberta Government Manpower Growth Report (Hyndman)
Reviewed.
Source: Provincial Archives of Alberta, PR1986.0245, Box 45, File #630.
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