The government saw it coming according to documents
The Alberta Federation of Labour claims the Alberta government was warned in 2010 a cut in energy royalties would result in a budget deficit. A government document titled "Energizing Investment Phase 2: Royalty Curves and Adjustments," demonstrated how royalty reductions would create budget deficits in the 100s of millions of dollars from 2010 to 2013, while without the reductions, the then Stelmach government was predicting a $500 million surplus for 2013. The document was dated May 25, 2010. Two days later, the provincial government reduced royalty rates.
"They've been acting like this year's deficit came as some kind of surprise to them, and they've tried to point fingers at bitumen prices," Alberta Federation of Labour president Gil McGowan said in a press release. "But the deficit was predictable, and was predicted in this report to the minister. Royalty reductions were to blame, and were blamed in this report."
Premier Alison Redford has for several months explained the deficit in this year's budget was an unavoidable result of a "bitumen bubble" — unanticipated low bitumen prices due to an over-supplied market. The AFL points to this document as evidence the deficit is unrelated to supply and demand; rather, it is the foreseeable result of royalty cuts.
Fast Forward News, FFWD, Thursday, Apr. 04, 2013
Byline: Suzy Thompson in News