New report says Kenney's planned public service cuts will devastate Alberta's economy

EDMONTON – Implementation by the Kenney government of the MacKinnon report’s recommendations could drive Alberta’s economy into recession and result in the loss of up to 113,500 jobs in both the public and private sectors, according to a new report released today. Read synopsis.

Created by the Alberta Federation of Labour in consultation with Toronto economist Hugh Mackenzie, a former member of the Alberta Premier’s Advisory Committee on the Economy, the report shows that the MacKinnon panel’s key assumptions on GDP growth and revenue growth are seriously flawed and, if implemented, the panel’s recommendations will devastate Alberta’s economy.

The AFL report found that the cuts to spending and public services being contemplated by the Kenney government are not required to manage Alberta’s current fiscal deficit. Rather, they are designed to achieve Kenney’s ideological objective of shrinking the size of government and dramatically reducing public services that Albertans rely on.

The report warns that the loss of 50,000 jobs during the oil price crash from 2014 to 2017 will pale in comparison to the 113,500 jobs that would be lost in Alberta if the Kenney government goes ahead with cuts of the magnitude being considered.

QUOTES:

“A big chunk of the provincial deficit forecasted for 2022-23 has been created by the Kenney government through corporate tax cuts that will be paid for by Albertans in the form of job losses and drastic cuts to public services. These are the services that help ensure Albertan’s remain healthy and active in our communities, that our local economies remain stable, and that our children receive a quality education.”

“In the most likely scenario, adjusting the report’s inexplicable revenue projections and taking into account the government’s announced preference for an immediate revenue contingency allowance, and allowing for population growth and inflation, the MacKinnon recommendations would mean cuts in public services of 20.2% over 4 years. These cuts would result in a cumulative negative impact on GDP of 4.8% and a loss of just under 114,000 jobs.”

“The report makes it clear that the ‘Kenney Recession’ will be unique compared to other hardships Alberta has had to endure. While previous recessions have been caused by external market forces that are largely beyond the control of the government of Alberta and independent of its policy choices, the hardship caused by the Kenney government’s ill-considered deficit elimination strategy will be entirely self-inflicted.”

Gil McGowan, President, Alberta Federation of Labour

 

-30-

 

MEDIA CONTACT:

Ramona Franson

Director of Communications, AFL

rfranson@afl.org