Finance minister responds to Wildrose capital plan
The Wildrose Official Opposition released its 10-Year Debt Free Capital Plan, which included $3.8 billion in spending for schools, Feb. 13.
Airdrie MLA Rob Anderson (Wildrose) said new school builds should go to school divisions like Rocky View Schools where the need is greater in order to keep up with the growth.
“Airdrie will need (a new school) right away, an additional (school) including the ones being built right now,” said Anderson.
“There’s probably another one in Rocky (View Schools) that would be needed right away.”
Anderson also mentioned that the Province is paying too much money for the schools it’s building currently, adding that there are also problems in the tendering process. The Province recently broke ground on a middle school in Sagewood and a high school in Prairie Springs.
“I don’t think parents are looking for Taj Mahals for schools, they’re looking for good, quality, strong, sturdy schools that have what’s needed,” said Anderson. “They’re not looking for atriums and murals and who knows what else they have in new schools these days.
“We could build the same school for less money.”
Anderson said the P3 model (public private partnership) is costing the Province money, but Finance Minister Doug Horner explained the increase in spending is a result of construction costs in Alberta as compared to other jurisdictions.
“That’s a fact of a hot economy and we are dealing with it just as industry is dealing with that,” said Horner.
“You want to make sure that your economy is clicking on all cylinders, you can’t then say that we’re going to be cheaper than Newfoundland to build a house.”
Anderson also claims that the Province could save money by partnering with developers.
“In Airdrie, for example, there are a lot of construction companies that develop subdivisions,” said Anderson.
“They have offered in the past to build schools for us just because they want to up the value of their subdivisions and the lots they’re selling on the subdivision. But we haven’t allowed for that, the government hasn’t allowed for that. Why wouldn’t we allow for that?”
Anderson said if a developer is willing to build a school, they should be allowed to.
The Wildrose capital plan also includes $10.8 billion over 10 years on the Province’s transportation networks.
Anderson says one of the more important parts of that planned spending is there won’t be any borrowing to build roads.
“It’s not like a home mortgage where you buy an appreciating asset that increases in value and then you can sell it at the end for a profit if you wanted,” said Anderson. “Roads and schools and so forth, they’re important but they don’t increase in value, they’re actually very costly to maintain and you can’t sell them.
“We think we can build the schools, hospitals and roads that we need without having to borrow.”
But Horner shot back against the Wildrose plan, saying it would require cutting $6 billion out of the operating budget; the Wildrose capital plan does not state specifically where funding would come from for capital projects other than reducing government inefficiencies and coming up with creative cost-saving measures.
“I’m curious as to a plan that shows that they’re going to pay cash when they haven’t showed where the cash is coming from,” said Horner.
“It’s too easy to say it’s coming from general revenue.”
A change the Wildrose capital plan proposes is a move from municipal grant programs to one provincial transfer to municipalities based on a per capita basis.
“Right now, you have a whole bunch of granting programs that may or may not be for things that municipalities need and so for example you will have a ice rink granting program, well not every municipality needs an ice rink,” said Anderson.
Anderson said instead, government should give 10 per cent of the provincial tax revenue, including income, corporate, and fuel tax revenues to local governments and let them choose how to spend it.
“In addition to that, when we’re back in surplus, we would take 10 per cent of the surpluses that we have as a province and we also give that back to the municipalities as well,” said Anderson. “So that when times are good and growth is high, municipalities will have a little bit more money to help with the infrastructure that they need.”
Horner says that single transfer would reduce the amount given to municipalities.
“I’m assuming they’re excluding MSI (Municipal Sustainability Initiative) out of their calculation because it’s roughly revenue neutral to do 10 per cent of the tax, well then that’s not including MSI transfers we currently do which are close to $1 billion,” said Horner.
“(Municipalities) are feeling the pressures of tremendous amounts of people moving into the province and Airdrie is obviously feeling a huge brunt of that.
“We’re not going to balance the budget on the backs of municipalities.”