Changed times for finance minister

Rob Antle
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Marshall warns about spending sustainability

He may be back in his old job, but Finance Minister Tom Marshall is facing a new set of challenges.

"Obviously when I was there last time, we had revenues like never before, driven mainly by oil and minerals," Marshall told The Telegram.

"Now we're in a different time. We're in a great recession and the numbers are different."

In Marshall's first tenure as finance minister, spanning most of 2007 and 2008, booming oil prices saw the province record sky-high surpluses and slash billions off its net debt.

Government -

He may be back in his old job, but Finance Minister Tom Marshall is facing a new set of challenges.

"Obviously when I was there last time, we had revenues like never before, driven mainly by oil and minerals," Marshall told The Telegram.

"Now we're in a different time. We're in a great recession and the numbers are different."

In Marshall's first tenure as finance minister, spanning most of 2007 and 2008, booming oil prices saw the province record sky-high surpluses and slash billions off its net debt.

But this fiscal year, lower commodities prices led the government to project a $750-million deficit.

Marshall issued a warning about the pace of government spending.

"We have to ensure that the investments we make - whether we make them in health, or in education, or anywhere else - are sustainable over the long term," he said.

Marshall added that those investments must allow the government to provide access to programs and services, both "today and for future generations."

Those investments have been cycling higher and higher in recent years. This year, the province expects to spend $519 million more on programs than it did last year.

In 2009-2010, the government budgeted to pay out a shade less than $7 billion in gross expenditures.

In the Williams administration's first budget, brought down in 2004, gross expenditures were budgeted to come in at under $4.3 billion.

The current estimate is 63 per cent higher than five years ago.

"At the current level, I think it's going to be very difficult to sustain it, because the way the costs are going - we've gone from X-ray machines to CAT scan machines to MRI machines to PET scan machines," Marshall said when asked if today's level of overall government spending is sustainable.

"And people will want us to provide that investment. The cost of drugs is also high. So we have to spend our monies wisely to make sure, as I said, that people have access to the system and access to good quality health care when they need it."

Marshall's challenge now is balancing declining revenues against increasing needs.

He said the key is "spending wiser, and spending smarter."

Marshall - who boomeranged back to finance in the cabinet shuffle forced by Paul Oram's resignation from politics earlier this month - said it's too early to tell definitively where the province's ledger books stand for this year.

But it is unlikely he will have the same amount of cash as the oil-fuelled years of the recent past.

"I would think so, but when I came into this job last time, I never thought oil would go through the roof the way it did. We're starting to see signs - oil took a run the last couple of days, the dollar took a run the last couple of days. So what does that mean? I can't predict the future. I'm asked to, but I can't. Who knows what the future is going to bring."

rantle@thetelegram.com

Organizations: The Telegram

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Recent comments

  • new liberal
    July 02, 2010 - 13:31

    The pc's couldn't budget thier way out of a paper bag.They've been liveing off our oil money,negotiated by past governments ,every since that stold power.The peaple of rural nl are beginning to see what a wasted vote it is to vote for a pc..Tory times are hard times --no truer words have been uttered in rural nl

  • Lord Smotherin
    July 02, 2010 - 13:30

    Marshall's challenge now is balancing declining revenues against increasing needs.

    He said the key is spending wiser, and spending smarter. ----------But you buggers still took your raise while telling everyone else to pull that belt a bit tighter.....Right Tommy???

  • William
    July 02, 2010 - 13:29

    be carful, the nurses might ask for another raise

  • Oil Patch
    July 02, 2010 - 13:28

    No matter what the goverment says, they won't come near the projected 750 million dollar deficit.
    During the budget I beleive oil was projected to be @ $60, look where we are at this morning $78.10.
    I predict we will break even this year!

  • Wait...
    July 02, 2010 - 13:27

    Keep on dreaming people. I take it not one person has looked into what is going on in either Alberta or Alaska? Ask those people just how things are going in the oil and gas business and you will have an idea of things to come here. Face it, with more and more people out of work, just where do you think this small income will go? It will be used for those without, not for those that have. The divide is growing and for those that keep ducking under the sand, I fear you will be faced with a very harsh reality once you pull your head back up.

    But hey, what do I know. Oh ya I have seen the same-thing repeat in the past, how's about you? My advice is to stash away what you have for that cold rainy day that is not too far off on the horizon. You are going to need it since Governments are going broke faster than the average citizen.

  • Taxpayer
    July 02, 2010 - 13:10

    Chances are we will do much better then break even, with the high dollar and oil breaking 80 dollars a barrel. When nearly 60 % of your budget is being spent on health care, we better start making money somewhere.

  • new liberal
    July 01, 2010 - 20:19

    The pc's couldn't budget thier way out of a paper bag.They've been liveing off our oil money,negotiated by past governments ,every since that stold power.The peaple of rural nl are beginning to see what a wasted vote it is to vote for a pc..Tory times are hard times --no truer words have been uttered in rural nl

  • Lord Smotherin
    July 01, 2010 - 20:19

    Marshall's challenge now is balancing declining revenues against increasing needs.

    He said the key is spending wiser, and spending smarter. ----------But you buggers still took your raise while telling everyone else to pull that belt a bit tighter.....Right Tommy???

  • William
    July 01, 2010 - 20:17

    be carful, the nurses might ask for another raise

  • Oil Patch
    July 01, 2010 - 20:15

    No matter what the goverment says, they won't come near the projected 750 million dollar deficit.
    During the budget I beleive oil was projected to be @ $60, look where we are at this morning $78.10.
    I predict we will break even this year!

  • Wait...
    July 01, 2010 - 20:14

    Keep on dreaming people. I take it not one person has looked into what is going on in either Alberta or Alaska? Ask those people just how things are going in the oil and gas business and you will have an idea of things to come here. Face it, with more and more people out of work, just where do you think this small income will go? It will be used for those without, not for those that have. The divide is growing and for those that keep ducking under the sand, I fear you will be faced with a very harsh reality once you pull your head back up.

    But hey, what do I know. Oh ya I have seen the same-thing repeat in the past, how's about you? My advice is to stash away what you have for that cold rainy day that is not too far off on the horizon. You are going to need it since Governments are going broke faster than the average citizen.

  • Taxpayer
    July 01, 2010 - 19:46

    Chances are we will do much better then break even, with the high dollar and oil breaking 80 dollars a barrel. When nearly 60 % of your budget is being spent on health care, we better start making money somewhere.