Provincial budget includes record spending, AISH increase
The Province of Alberta will post a fifth consecutive deficit and spend a record $41.1 billion this year after Finance Minister Ron Liepert delivered the 2012-13 budget, Feb. 9.
The $886-million shortfall will be covered through the Province’s Sustainability Fund, which shrinks from $7.4 billion to $3.7 billion. The government is calling for surpluses of $952 million in 2013-14 and $5.2 billion in 2014-15.
Three-quarters of this year’s budget is going toward health care, human services and education.
“This is not a budget where you’re going to see deep cuts into things like health and education and the reason for that is because, as we travelled the province last fall, that’s not what Albertans want,” said Liepert. “So we are delivering what Albertans told us in our travels around the province.”
The government will add $1.2 billion to health care for a $16--billion annual budget, an increase of 7.9 per cent. Also increasing is the Province’s education spending, rising 3.4 per cent to $6.2 billion. Within education, $482 million will be spent maintaining and operating schools and the Province promised $232 million for Small Class Size Initiatives.
Albertans will pay a total of $1.8 billion in education property taxes this year, up by $107 million.
Premier Alison Redford made good on her leadership election promise of bumping up Assured Income for the Severely Handicapped (AISH) payments by $400 a month to $1,588, effective April 1, for an annual increase of $271 million.
Public infrastructure will receive $16.5 billion over the next three years including $5.6 billion for municipalities, $3.5 billion toward provincial highways and $1 billion to schools. The budget will also put $2.8 billion back into the Municipal Sustainability Initiative.
In addition, $300 million will go toward social and affordable housing as well as the Homelessness Prevention Initiative.
Seniors will receive $75 million over three years for affordable old-age housing.
The Province expects 14 new schools to be completed in 2012, as well as the Edmonton Clinic South, South Calgary’s Health Campus, SAIT’s Trades & Technology Complex and the new Edmonton Remand Centre. The new facility will also have 180 new peace officers and other staff members when its doors open.
Opposition critics are having a heyday with the budget, calling it everything from a “fantasy” to “extremely optimistic.”
“I see lots of spending initiatives here but no savings,” said Hugh MacDonald, Liberal MLA finance critic. “If we’re going to have these surpluses again, we’ve got to stay disciplined.”
MacDonald expressed concern over the Sustainability Fund being depleted again.
“If the Sustainability Fund is gone, what are we going to do?” he said. “This is not how you would run your household budget, you would save some. You wouldn’t spend everything you got.”
Wildrose Party finance critic and local MLA Rob Anderson called Feb. 9’s announcement “Alison in Wonderland.”
“Their projections are literally the stuff of a fiction novel,” said Anderson. “Given the world economic crisis… if the price of oil was to dip to $75 a barrel, our provincial balance sheet would implode.”
The Tories are banking on oil prices to hover around $100 to $110 a barrel over the next three years to usher in balanced budgets once again.
“It’s a spendthrift budget that’s meant to buy votes with Albertans’ money,” he said. “If the PCs get back in, there will be no more savings left by next year and we will be raising taxes.”
Anderson said he was glad to see the premier hold true to her word and raise AISH payments.
NDP leader Brian Mason said the Province is living in the past, hoping for surpluses the government hasn’t seen in more than five years.
“They’re hiding a big deficit by predicting boom-like economic growth and draining the Sustainability Fund. They’ll kick dust into Albertans’ eyes until after the coming election, when they’ll either have to raise taxes or painfully slash programs,” said Mason.
“Albertans shouldn’t take this budget to the bank.”
Mason said seniors are at risk with this budget and said the cost of day-to-day living will increase.
No taxes or increases were introduced with the budget, however, the government indicated it may look at introducing new fees after this spring’s provincial election.