Today is not just any day and this article is not just an everyday article that can be skimmed and quickly forgotten because as I write this article it is Budget Day!
How is it going to impact our lives? Are taxes going to go up? Will the budget bring deep and serious cuts in spending? Who will be the winners in this year’s budget?
All of these questions are asked in light of a new government that has inherited a $62 billion dollar debt that could blossom to $100 Billion over the next four years if spending is not curtailed.
Alberta’s debt has been growing faster than any other sub-national debt in the world. Alberta has experienced a deficit budget every year since 2008. Alberta could spend approximately $10.4 billion dollars less if our per capita spending matched the average of Canada’s three largest provinces. We spend about $2,600 dollars more per person to receive approximately the same level of services.
The budget that the Finance Minister presented to Albertans focused on controlling spending by reducing the budget by about 3 cents for every dollar the government spends. That may not sound like a lot but it speaks to the care that was taken to reduce spending while ensuring that Albertans priorities of Health Care, Education and taking care of the vulnerable would also be reflected in the budget.
The Minister has produced a realistic budget that uses cautious revenue projections. He estimates that there will be .6% real GDP growth this year with growth rates over the next three years of 2.7%, 3% and 3%. He has also used a conservative oil price for oil revenue predicting that the WTI price for oil will be $57.00 this year and that it will likely rise to $63.00 over the term of the present government. A possibility of a global recession and how successfully we increase our access to tidewater could affect the predictions of revenue that this budget is built upon.
The budget is built upon prudent budget cuts that look to ensure effective use of tax dollars. With this in mind the government is predicting a 2019/20 budget deficit of $8.7 billion dollars while predicting that subsequent budgets will reduce yearly deficits until in the fourth year of the government’s mandate there is a projected $600 million dollar yearly surplus.
Health and Education spending will remain relatively stable with few if any cuts in spending while Advanced Education is looking at about a 5% reduction in overall spending. Municipalities will be facing spending cuts but Community and Social Services will see an approximately 7.6% increase and Seniors and Housing will receive a 1.6% increase and Children’s Services will receive a 15% increase. The goal in this budget is to bring Public Sector remuneration in line with other provinces and the budget predicts a 7.7% reduction in the size of the Public Service over the course of the next four years obtained primarily through attrition as individuals retire.
Finally, the budget also focuses on Standing Up for Albertans. In light of the results of the federal election this budget will follow through with the campaign promise to spend $30 million on the Canadian Energy Center that will promote and defend Alberta’s energy industry. There is also the intent to pursue fiscal fairness within the Canada by addressing the billions of dollars that leave Alberta every year through equalization payments.
The 2019/20 budget successfully addresses Albertans priorities of Health Care, Education and the vulnerable while facing up to the fiscal realities that have left the province in financial distress. It addresses fiscal issues responsibly with cautious revenue projections and realistic reductions in government spending while increasing spending in some areas but above all it addresses the priorities that Albertans set in the last election.
Mark Smith is MLA for the Drayton Valley-Devon constituency and writes a regular column for The Pipestone Flyer.