Alberta Budget 2016: What Calgary's mayor, business leaders and post-secondary institutions think

One aspect of the Alberta provincial budget has the Calgary mayor seeing red. There won’t be an exemption or rebate on the carbon tax applied to fuel for municipal fleet vehicles, like police cars.

Nenshi slams lack of carbon-tax exemption for cities, Chamber worries about deficit, U of C pleased by funding

Calgary Mayor Naheed Nenshi says Thursday's provincial budget, despite some shortfalls from a municipal point of view, could be a sign of the need for a new conversation on resource revenue. (CBC)

One aspect of the Alberta provincial budget has the Calgary mayor seeing red.

There won't be an exemption or rebate on the carbon tax applied to fuel for municipal fleet vehicles, like police cars.

"This isn't going to fly," Naheed Nenshi said.

"And we need to have a way to make sure that municipalities for real municipal use are exempted or rebated that carbon tax on our fuel."

He said the lack of rebate will cost Calgary taxpayers initially about $2.7 million, but that will rise over time to $6.5 million.

Alberta Premier Rachel Notley smiles as Minister of Finance Joe Ceci delivers the 2016 budget in Edmonton on Thursday. (Jason Franson/Canadian Press)

"To put that into context, that is a half-point increase on the property tax only for paying another order of government its taxes," Nenshi said.

Overall he is happy with aspects of the budget, particularly on housing.

"This commitment to redeveloping aging housing and building new housing is very, very important and it is important to do now because it is stimulative," he said.

"These projects tend to be small, we can get them to work quickly and of course construction prices are going down or are lower now than they were before."

Rachel Notley's NDP government introduced its second budget Thursday raising eyebrows with a $10.4 billion deficit this year and total debt predicted to hit $57.6 billion by 2019.

"I'm aiming to balance the budget by 2024," Finance Minister Joe Ceci said.

The numbers and timelines are making the Calgary Chamber of Commerce uneasy.

"We still are concerned with the size of the deficit, now exceeding $10 billion and with really no clear trajectory to seeing that reduced and brought back into balance in the foreseeable future," said chamber president and CEO Adam Legge

Adam Legge, president and CEO of Calgary Chamber of Commerce, says he is concerned about both the size of the debt and lack of a clear plan to eliminate it. (CBC)

Legge said the small business tax cut of one per cent will mean a savings of about $5,000 for eligible business owners on the high end of the category, but it's the $90 million investor tax credit that has him cracking a smile.

"That is something we have been advocating for, for many, many months … we are very excited to see that," Legge said.

The Canadian Association of Petroleum Producers (CAPP) says the budget doesn't contain many surprises.

The economy-wide carbon levy, for example, will hit $20 a tonne starting in 2017, then $30 in 2018 on the purchase of fossil fuels that produce greenhouse-gas emissions.

"Certainly with the pricing environment that we have for oil and natural gas today, any increased costs does have an effect," CAPP president and CEO Tim McMillan said.

Tim McMillan of CAPP wants some carbon tax revenue directed to the energy industry. (CBC)

"But it is something that the government had put forward several months ago on the large emitters."

McMillan says they support where the funds will go.

"The acknowledgement that the revenues from the carbon levy would be going into research and technology, that is something we are very supportive of," he said.

"As large emitters that have been paying into the carbon fund for years we think it is very valuable that we can recycle those costs, can make improvements, invest in technology. It continues to make Alberta a leader."

Post secondary institutions happy

The University of Calgary liked what it saw in the budget.

The province "delivered a budget that continues to support post-secondary education and students in the province," said president Elizabeth Cannon.

A previously promised two per cent increase for post secondary brought the total commitment of $5.9 billion to universities and colleges across the province.

"This support is critical to meeting the growing demand from new students and those looking to upgrade their skills during the economic downturn," Cannon said.

Sharon Carry, president and CEO at Bow Valley College, said the funding is stable "while also ensuring learners benefit from another year of tuition freeze."

"However, many Alberta institutions still need infrastructure money in order to maintain facilities and grow. We thank the Government of Alberta for realizing this is a priority, and we anticipate they will be partnering with the Government of Canada on investing in post-secondary infrastructure," Carry added.

Infrastructure funds mostly provincial

Meanwhile, Nenshi says even though most of the infrastructure funds are focusing on provincial projects, it will still have a positive impact on Calgary.

"That is money that will lead to projects that will put people to work and have real benefits for the Calgary economy so we are quite pleased about that as well," the mayor said.

Nenshi said as a whole, this budget could be a sign of a longer term shift.

"The real issue here is, are we ready as a province to make the structural change that is needed in our economy so we are not just waiting for the price of oil to go back up again," Nenshi said.

"And this budget indicates a bit of a move that way but we as Albertans have to be able to work with our governments … to be able to say, 'Alright, how are we going to change ourselves so that we get off this resource revenue roller coaster?' … There are ways to do that, but they are going to require a lot of conversations with Albertans."

With files from Scott Dippel and Natasha Frakes