Alberta's NDP government to release 1st budget

The Alberta NDP government releases its first budget today, amid low oil prices and job losses in the resource sector.

Declining revenues put new government in a tight spot

Alberta Finance Minister Joe Ceci used his late father's work boots on Monday to discuss the theme for his budget. (Jason Franson/Canadian Press )

The Alberta NDP government releases its first budget today, amid low oil prices and job losses in the resource sector.

Finance Minister Joe Ceci has already said his budget, to be released at approximately 3:15 MT, will have a projected record deficit of around $6 billion.

Ceci and Premier Rachel Notley say they will not make cuts in health care, education and human services to balance the budget. They also made a commitment to avoid job cuts in the civil service.

This comes amid promises to diversify the economy to lessen the province`s dependency on oil and gas revenues, and to build infrastructure like schools, roads and hospitals.

"When times are bad, you run deficits. And when times are good, you have surpluses," Ceci said Monday.

"We're going to get us back into balance, the economy's going to pick up and we're going to help it get better."

Not everyone is on board. Ever since the NDP took power in May, Notley and her government have been criticized for starting the phase-in of a $15 minimum wage over three years, and for ending the flat 10 per cent income tax paid by individuals and corporations.

Business groups have also expressed concern about the government's current review of the resource royalty structure and climate change strategy, which won't be completed until the end of the year.

However, supporters of the government are welcoming the ideological shift in how Alberta's finances are managed, with a looser approach to spending, after 44 years of  Progressive Conservative budgets.

Here are some things to watch for in the budget:

1. The Dodge report

In June, Notley asked former Bank of Canada governor David Dodge to develop a plan for how Alberta can best build much-needed infrastructure. Dodge was asked to look at what projects should be a priority and how to build them without draining Alberta's finances and overwhelming the labour pool.

The move was seen as a repudiation of the Conservatives, who were long suspected of placing politics over need when making decisions on what to build and where.

Dodge's report will be included as part of Tuesday's budget and is expected to inform the government's spending decisions.

The Alberta NDP led by Premier Rachel Notley is trying to grapple with the loss of billions of dollars in revenue caused by the drop in oil prices. (Larry McDougal/Canadian Press )

2. Will there be any new fees or taxes?

Notley is following her PC predecessors in one key area. She has been adamant there will be no provincial sales tax, even though many economists say it would be the fastest way to make up for a drop in resource revenues.

Introducing a sales tax would be political suicide, according to many Alberta politicians, and Notley doesn't feel she needs to go there. However, it seems like everything else is on the table.

"We have not ruled out every other kind of tax," she said Monday. "But I'm not going to say anything more. We have not ruled them in, either."

3. Economic diversification plan

Previous PC governments have said the province needed to get off the fiscal roller-coaster caused by fluctuating oil prices, but nothing changed. The NDP is vowing it will finally take action.

Ceci said the budget will have measures to create jobs for Albertans and diversify the economy.

4. How much will the deficit really be?

In the summer, Ceci said the budget would be in the range of $5.9 billion to $6.5 billion. At the end of September, he said it wouldn't reach the high end of the range. Notley said Monday the Heritage Savings Trust Fund won't be touched, but the government will likely draw heavily on its savings account known as the contingency fund. The fund sat at $6.5 billion at the end of the 2014-15 fiscal year.

5. Will the government revise the Fiscal Management Act to allow for more borrowing?

This act, passed when Ralph Klein was premier, prohibits the government from running an operating deficit and limits how much the government can borrow. NDP house leader Brian Mason said that any changes to the act won't come until after the budget is tabled.


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