Opposition parties – and some groups representing public interests – were quick to slam the recently unveiled budget put forward by the province this week.
Although there are no new taxes or tax rate increases, demands are increasing across the board with about 100,000 newcomers moving to Alberta each year as well. But the reduction in bitumen royalties has led to an expected drop in resource revenue of $6.2 billion from the 2012 budget’s forecast for 2013-14.
“The Bitumen Bubble continues to a have a severe impact on our revenues,” said Doug Horner, president of Treasury Board and minister of finance.
“This budget is not just about this year, but about what we need to do as a province to prepare for 20 years from now when our population will be over five million people,” said Horner. “We need to spend smarter and focus on providing excellent public programs and services while expanding and maintaining our infrastructure for the future. Budget 2013 is a big step in this direction.”
The 2013-16 Capital Plan supports $15 billion in infrastructure projects, with $5.2 billion in each of the next two years and $4.7 billion in 2015-16.
There is also a 3% funding increase for Alberta Health Services. Although lower than the 4.5% previously planned, officials said it was expected and that they have prepared for the change.
Other highlights include $500 million towards 50 new schools and 70 school modernizations, officials say. There is also increased funding for AISH, Persons with Developmental Disabilities, homelessness programs and child intervention programs.
The province also announced post-secondary capital project funding of nearly $500 million over three years.
Funding for the Municipal Sustainability Initiative (MSI) will also be maintained at nearly $900 million this fiscal year, allowing municipalities to continue to meet local infrastructure priorities.
Red Deer South MLA Cal Dallas said that during the campaign for the last election, constituents told him they expected the province to meet the expanding demands for health care, education and to make sure vulnerable populations were appropriately provided for. “But they also had a strong message that the spending we were doing was responsible.
“As we worked our way through the process of building this budget, the first challenge was the rapid decline in royalty resource revenues. We made some commitments in respect to the budget, and the first one was to live within our means.”
He said people also he talked to wanted assurance that infrastructure funding would be in place to continue to expand the economy. “That’s investment in education but it’s also investment in the hard infrastructure in how we move our products to market and that type of thing.”
On the local education front, officials say the budget will be tough but manageable as increased enrollment will likely make up the difference.
Funding for the Alberta Initiative for School Improvement as well as transportation fuel subsidies will be eliminated effective April 1 resulting in an anticipated loss of $340,000 in the current year’s operations, officials say.
The province will maintain the per student allocation at existing levels and fund enrollment growth for jurisdictions. Red Deer Public is anticipating an increase of 200 students next year.
“In the end, enrollment growth will likely mitigate the anticipated loss in funding. We expect to maintain our funding, but will have to do that serving more students,” said Board Chair Lawrence Lee.
The District is also pleased that announced funding cuts for inclusive education will not proceed, he said.
“This had been a significant issue for districts across the province, with Red Deer Public anticipating a cut of up to $1.8 million in annual funding. We continue to make significant gains in inclusive education and this funding is essential to continue that work. We are pleased the minister heeded calls from many jurisdictions to maintain this funding and included a two per cent increase,” says Lee.
Recognizing facility challenges across the province, the District is hopeful it will receive infrastructure funding for new and modernized school space to address accommodation issues.
The budget includes plans for 50 new schools and 70 modernizations. “We have some facility challenges that need immediate attention,” said Lee.
Some critics floated the idea of introducing a sales tax would help bypass funding shortages, but Dallas said the province’s comparatively low taxes is a huge driver that makes things happen in Alberta including the influx of 100,000 new people to the province every year.
“There is no one here that would ever take lightly the importance of having that attractive environment to create jobs and really provide a pathway to building our communities.”
Meanwhile, opposition leaders were quick to slam the budget – Liberal leader Raj Sherman called it the ‘bankrupt budget’.
“This is an intellectually and morally bankrupt budget,” says Sherman. “Alison Redford is doubling down on trickledown economics – a failed economic theory. It leads to inadequate revenues to pay for public services, and the only things that trickle down to regular Albertans are burdens.
“The overwhelming majority of Albertans want progressive income tax and a higher corporate tax,” says Sherman.
Wildrose Finance Critic Rob Anderson said every last dollar spent on infrastructure projects for the foreseeable future will come from debt with no clear plan for how it will be paid back.
“This government talks about living within its means, but it is spending so far beyond its ability that our children are going to forced to pay their bills. Premier Redford is taking Alberta down a dark path, one that we’ve been down before, and we know where it leads.”
Anderson also criticized the government’s new borrowing-to-save policy.
“Saving money is a great idea as long as you’re not going into debt to do it,” Anderson said. “That’s like taking out a second mortgage to invest in an RRSP.”