A growing number of Albertans appear to be pessimistic about the provincial economy and view cutting government spending — instead of raising taxes or boosting expenditures — as the preferred option for dealing with the budget deficit.

The Mainstreet Research survey found just 21 per cent of Albertans feel optimistic about the economy in the next year, a drop of 20 percentage points from May. Although 40 per cent said they felt good about their household’s financial situation in the coming months, that number has fallen 12 percentage points in the past three months.

“That still surprised me, given the last couple of weeks of oil going even further down,” said Quito Maggi, president of Mainstreet Research. “Albertans know how directly that affects them.”

Lori Williams, an associate professor in policy studies at Mount Royal University, says she believes the provincial government’s delay in releasing its budget is likely contributing to the negativity.

“(Premier Rachel Notley) doesn’t control the oil prices, but she does have control over taxes and royalties. There is concern, pretty broadly, about the uncertainty,” Williams told the Herald.

“Obviously there’s some people for whom the uncertainty isn’t very good because they’ve lost their jobs, but the fact that the numbers for personal finances are better is because there’s a little more certainty, a little more clarity about what the future holds than on the provincial level.”

The automated phone poll of 3,075 Albertans also asked respondents how the provincial government should respond to the drop in oil price.

Last week, Notley said her government was looking at areas to reduce spending, while still protecting front-line services.

The largest number of people surveyed, 38 per cent, said the government should cut spending to decrease the deficit. Another 26 per cent said Notley should maintain or increase spending to protect public services. The same proportion were unsure, while only 10 per cent were in favour of raising taxes.

“Being prudent and fiscally responsible in the short-term, something (Notley has) indicated she’s planning to do, seems to have the largest support of all the options available,” said Williams. “I think she’s quite clearly aware that any more tax increases — including royalty increases — in this economic slump is not a good idea.”

The poll was conducted Aug. 28, the same day the provincial government announced who would sit on the royalty review panel.

The panel will examine rates charged for oil and gas produced on Crown land in the coming months, and produce a report by the end of the year.

Although many in the energy sector were happy with the province’s choice of panel members, others remained concerned about the effect on profits if the government decided to raise rates. The head of the panel, Dave Mowat, has said rates wouldn’t change until the end of 2016.

The poll shows, however, that most Albertans — 47 per cent — remain in favour of the royalty review, while 39 per cent disapproved. Another 13 per cent were not sure.

“That is down from 65 per cent in May but represents a significant amount of support for the policy in very tough economic times for the province,” Maggi said.

Support for the review was highest in Edmonton, at 56 per cent. Approval sank to 43 per cent in Calgary, and 46 per cent outside the province’s two largest cities.

Williams says more Albertans might be in favour of the review if they knew it wouldn’t cause rates to go up.

“If people had a better sense of what the policies were, maybe then many corporations could perhaps make decisions … Not knowing what the oil prices are going to be combined with the uncertainty about other matters has got people a bit nervous.”

The poll has a margin of error of 1.77 percentage points, 19 times out of 20.

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