Calgary·Budget 2019

'Path back to balance' or 'disconnected from reality?' Budget divides Albertans

With its first budget released Thursday, the new Alberta government sets its sights on returning to surplus by the 2022-23 fiscal year — but to get there, the province will absorb cuts to public sector jobs, post-secondary institutions and municipal projects.

Finance minister says current focus is eliminating annual budget deficit

Finance Minister Travis Toews revealed the United Conservative Party's first budget at the Alberta legislature on Thursday. He addressed the Calgary Chamber of Commerce on Friday. (Jeff McIntosh/The Canadian Press)

With its first budget released Thursday, the new Alberta government sets its sights on returning to surplus by the 2022-23 fiscal year — but to get there, the province will absorb cuts to public sector jobs, post-secondary institutions and municipal projects.

The ripple effect of those cuts brought mixed reviews from political groups, stakeholders and social groups, much of which was vocalized Friday.

Speaking during a press conference in Calgary on Friday, Alberta NDP Leader Rachel Notley called the UCP cancellation of crude-by-rail contracts an "ideological decision."

"I completely reject the information they have tried to sell to Albertans about our crude-by-rail plan," Notley said. "We were briefed by ministry officials and independent experts that that plan would make money for Albertans to the tune of about $5 billion over four years. So we've lost that opportunity."

NDP MLA Shannon Phillips said her party had expected budget cuts to health care, education and city services, but less expected were changes pending to personal income taxes.

"I just think it's really surprising that we are all going to be paying more personal income tax as a result of the brackets not changing," Phillips said. "This is a piece of budget trickery that I think Jason Kenney, in his arrogance, thought that he could get away with, that no one would somehow notice that they were paying more in personal income tax.

"This is a guy whose multimillion-dollar pension is being indexed to inflation, but all the rest of us are going to pay. I think he's fundamentally disconnected from reality."

NDP MLA Shannon Phillips called the UCP budget a piece of "trickery," specifically criticizing the government's plan to remove indexing for non-refundable tax credits and taxation brackets. (Émilie Vast/CBC)

Though the government has said income taxes are not set to increase, the budget will remove inflation indexing on the personal exemption — effectively raising the amount paid in real-dollar terms.

That move is expected to save the province more than $600 million by the end of 2022-23.

Phillips said cuts to regional infrastructure also put local projects like the Green Line expansion of Calgary's LRT system in jeopardy.

"[There will be] far fewer dollars, far more reliance on Justin Trudeau to fund the Green Line, which I find ironic. The reason we don't have the same amount of funding for the Green Line is because Jason Kenney cancelled the carbon tax," she said. "And now, in January, we're going to be paying a carbon tax again — but the revenues for that will not be used to support the Green Line, necessarily.

"We're going to have to go back to Justin Trudeau, hat in hand, for him to make sure those funds are available, maybe."

Calgary Mayor Naheed Nenshi said the reduction in funding for the planned LRT — a reduction from $555 million over the next four years to $75 million — posed a "big problem" moving forward.

'More certain financial future': Calgary Chamber

In a release, the Calgary Chamber of Commerce said the budget would "clear a path back to balance" for Alberta.

"Budget 2019 takes tangible steps towards boosting competitiveness and providing a responsible fiscal plan," wrote Sandip Lalli, president of the chamber. "We will remain closely engaged with the government to ensure businesses of all sizes benefit. Further, we look forward to getting more details on diverse sources of revenue to provide the services Albertans need."

Speaking during a University of Calgary panel held Thursday prior to the budget's release, Lalli said diversification in fields outside of oil and gas — including in health sciences and agriculture — would emphasize to the rest of the country that Calgary is not a "one-trick pony town."

As part of its budget release, the government said a low-rate, broad-based approach to tax and a reduction of the corporate tax rate from 12 to eight per cent by 2022 would encourage diversification and grow local business.

UCP MLA Ric McIver spoke during a press conference held at the Calgary Chamber of Commerce on Friday. He is the transportation minister and deputy house leader. (Mike Symington/CBC)

Deficit slaying 'job No. 1'

Selling the budget to Calgary's business community at the Calgary Chamber on Friday, Finance Minister Travis Toews said returning Alberta's budget to balance is "job No. 1."

"Our focus at this stage of the game is firstly eliminating the annual budget deficit," he said.

"I take a look historically, and clearly Alberta has a spending problem … and this budget starts down the road to correct that problem." 

Transportation Minister Ric McIver said should provincial revenues be different than projected, the government would revisit its plan to balance the budget by 2023.

He also described the spending reductions as relatively modest, compared with what Alberta has seen in the past.

"Despite what Albertans may have heard from doomsayers over the last few weeks, these reductions are nowhere near the 18-per-cent cuts to programs and services Albertans remember from the mid-90s," he said.

With files from Émilie Vast, Drew Anderson, Michelle Bellefontaine, Hannah Kost and Mike Symington

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