Article content continued

The province is also pulling in less money than budgeted in personal income tax and corporate income tax, as well as less money from taxes on fuel and cigarettes as the fiscal update shows cash-strapped Albertans are smoking less, driving less and gambling less than expected.

The official opposition Wildrose Party’s shadow finance minister Derek Fildebrandt said in a release that the government’s plan increases debt and causes “credit downgrades every few months.”

“There is no attempt whatsoever to save money or begin to steer us back to balance,” he said in the statement.

Ceci has rejected the opposition’s calls for spending cuts and reiterated his position Tuesday. “Reckless cuts would only make a tough situation worse,” he said.

Tuesday’s fiscal update also shows the economy is now forecast to shrink by 2.7 per cent in 2016, following a contraction of 3.7 per cent in 2015 — which government officials said was the worst two-year contraction on record, and worse than the brutal recession of 1982-83.

There is no attempt whatsoever to save money or begin to steer us back to balance

“In the face of the oil price collapse and the economic impact of the wildfires, our government continues to take a prudent approach, controlling our spending, protecting critical public services and taking action to create jobs and diversify our economy,” Ceci said.

Most of the new jobs in Alberta in the last 12 months have been in health care, social assistance and education. Despite those gains, 49,100 net jobs were lost between July 2015 and the end of last month, the fiscal update shows.

In the last year, 29,000 jobs have been lost in forestry, mining and oil and gas; 28,800 jobs have been lost in manufacturing; and 11,000 jobs have been lost in construction.

The province’s unemployment rate rose to 8.6 per cent in July, after averaging 7.6 per cent in the first half of the year.

The government expects the province’s full-year unemployment rate will average eight per cent.

Financial Post

gmorgan@nationalpost.com

Twitter.com/geoffreymorgan