Alberta sitting on multi-billion dollar nest egg

Alberta has a nest egg hefty enough to survive through three years of recession, says Premier Ed Stelmach.

Called to address a beef industry convention in Red Deer on Friday, Stelmach described a plan designed to keep people working and continue current levels of service despite revenue losses due to a global recession.

Questioned by reporters afterward, he said the province has cash on hand, to the tune of $7.7 billion for operational costs and another $6 billion for infrastructure spending.

“That is cash. There is no jurisdiction in Canada that is sitting on cash. Every other government is going to have to go and borrow money to create a stimulus package.”

The cash will allow the province to come out better than others, if not necessarily sooner, said Stelmach.

But he would not speculate on how long it will take the world economy to start recovering.

“Most economists are saying we should come out in a couple of years, but we’re going to focus on three years,” he said.

Alberta’s dependence on trade means its fortunes will swing on those of its global trading partners, including the State of California, one of the provinces’ biggest customers.

So part of the plan will involve diversifying markets, said Stelmach.

Using livestock exports as an example, he said most of the beef and pork exported from Alberta goes into the United States, which is buying less because of its own shrinking economy.

At the same time, new opportunities are opening up in Europe, where governments are talking about lowering the trade barriers that prevent imports of Canadian food products.

Opportunities are available in Asia, as well, said Stelmach. But those countries will not buy meat that cannot be tracked back to through the system, to the day and place the animal providing the meat was born.

Traceability and age verification are therefore not negotiable and will have to be held firmly in place to reach into those markets, said Stelmach.

Stelmach said it was encouraging to hear President Barack Obama speak about trade relations following his meeting with Prime Minister Stephen Harper on Thursday.

“There were a couple of things that I was glad to hear. One is the fact that he’s looking to this whole issues of environment, especially through issues of climate change.

“The other is, he was very clear in staying away from any kind of protectionist movement in his own country, with respect to agriculture, forestry, oil and gas ... and that is good news for Alberta and for Canada.”

Contact Brenda Kossowan at bkossowan@reddeeradvocate.com