Alberta budget to eliminate health-care premiums by 2009

The Stelmach government unveiled a budget Tuesday that promises to eliminate health-care premiums on Jan. 1, 2009.
Alberta Minister of Finance and Enterprise Iris Evans says eliminating health-care premiums will save the average family $1075 a year. (Jimmy Jeong/The Canadian Press)

Saying the time has come for Albertans to reap added benefits from the province's prosperity, Premier Ed Stelmach's government unveiled a budget Tuesday that promises to eliminate health care premiums on Jan. 1, 2009.

"The government made a commitment to Albertans to eliminate health-care premiums within three, four years," said Stelmach. "We said we would do it sooner if we could and that is exactly what we are doing."

Government figures suggest the change will save the average family $1,056 a year, with total savings to Albertans and businesses estimated at $1 billion.

The 2008-09 financial plan also calls for record spending of $37 billion, up 9.7 per cent over last year, fuelled by $11 billion in energy revenues and a growing tax base. Included in that is $22.2 billion over three years to build roads, schools, health-care facilities and other critical infrastructure.

Despite the ever-growing expenditures, Finance Minister Iris Evans insisted it's a "prudent budget that stays within our means."

"This is a plan to deal with today's demands and pressures, while also looking ahead to a strong Alberta tomorrow," Evans said.

'This is a plan to deal with today's demands and pressures, while also looking ahead to a strong Alberta tomorrow.'— Finance Minister Iris Evans

The government is basing its estimates on oil selling at $78 US per barrel and gas at $6.75 US per gigajoule, considerably less than the present prices which are hovering around $115 US for oil and $10 US for natural gas.

As a result, many expect the projected $1.6 billion surplus to easily exceed that number.

The government has been under pressure from many business groups to divert as much as 40 per cent of its energy revenues into long-term savings.

The government will come up with a plan this year, and implement it in the next budget, Evans said.

Health still major portion of spending

Health care continues to be the largest line item in the government budget, gobbling up about 40 cents of every dollar spent.

The government will increase its spending on health over the next year by 9.4 per cent, with health authorities getting a minimum of six per cent more, and an average of eight per cent overall.

Alberta Health Minister Iris Evans speaks to media after the Tory caucus decided to shelf the Klein government's health-care reforms in Calgary on April 20, 2006. (Jeff McIntosh/The Canadian Press)

Edmonton's Capital Health Authority will see its funding increase by $119 million, to a total of nearly $2.5 billion. The Calgary Health Region is getting another $190 million, increasing its funding to nearly $2.4 billion.

The province's school boards will see their government funding grow by 4.53 per cent for the next school year. That reflects stagnant enrolment rates and the five-year contract reached with Alberta teachers earlier this year, the government said.

Advanced education will get a 10.2 per cent increase, reflecting what the government says is a need to invest in building a skilled workforce that can compete in the world economy.

There is also a pledge to spend $468 million over the next three years on crime reduction initiatives, including hiring 300 more police and other law enforcement officers.

Modest tax cuts

Albertans will see about $300 million in tax savings, according to the government, mostly from inflation increases to personal tax exemptions.

But there are also improvements in the Alberta Family Employment Tax Credit, which provides benefits to low- and middle-income working families, and increased deductions for people with disabilities or those who care for them.

Businesses will be able to claim tax credits of up to $400,000 under a new $60-million Scientific Research and Experimental Development Program to encourage research and innovation.

The government is also investing $100 million to establish the Alberta Enterprise Corporation, a new venture capital initiative.

More money for municipalities, housing

Municipalities will get an extra $200 million this year to help them build roads, transit systems and other major projects, bringing the total municipal grants for the year to $600 million. The government has pledged to continue increasing the support, eventually reaching $1.4 billion annually by 2010.

Alberta will also spend an additional $589 million over the next five years — a total of $1.1 billion — to build affordable housing. The government is promising to build 11,000 units of new low-cost housing over the period, 1,640 seniors units, and renovate 300 more units of seniors housing.

Among other major construction projects approved by the government are phase one of Edmonton's new remand centre and phase two of the Calgary Law Courts Centre, which involves a new parkade.


Budget 2008 highlights
 Eliminate health-care premiums on Jan. 1, 2009, saving the average family $1075 a year.
 Total spending $37 billion, up 9.7 per cent. Surplus projected at $1.6 billion.
 $22.2 billion over three years to build roads, schools and health-care facilities.
 Energy revenues projected at $11 billion based on $78 US for oil, $6.75 for natural gas.
 Health authorities get minimum 6 per cent increase, average 8 per cent overall.
 School boards get 4.53 per cent increase, universities and colleges 10.2 per cent.
 Increased benefits for low-income working families and the disabled.
 $600 million for municipal projects, up from $400 million.
 $1.1 billion for affordable and seniors housing, up $589 million.