Alberta spending at record levels in pre-election budget
Bitumen royalties forecast to nearly double by 2015
Alberta’s Progressive Conservative government is projecting an $886 million dollar deficit in its 2012-13 budget, a move away from the multi-billion dollar levels of recent years, thanks to what the province says are rapidly increasing bitumen royalties, strong land sales and a buoyant economic outlook.
The budget, unveiled Thursday by Finance Minister Ron Liepert, reflects Premier Alison Redford’s focus on health, social services, and support for families — priorities Liepert says were identified by Albertans during meetings he held across the province last fall with Deputy Premier Doug Horner.
"I think positive and I think that's exactly where this budget is going and it's not only positive, but it's realistic and it's responsible," Liepert said at a pre-speech news conference.
2012-13 $886M deficit
2013-14 $952M surplus
2014-15 $5.2 billion surplus
2012-13 $40.2 billion
2013-14 $44.0 billion
2014-15 $49.0 billion
Estimated value of Sustainability Fund
March 31, 2013 $3.7 billion
March 31, 2014 $2.4 billion
March 31, 2015 $4.8 billion
Bitumen royalties are forecast to be $5.7 billion in 2012-13, $7.6 billion in 2013-14 and $9.9 billion in 2014-15.
Expenditures are forecasted to be $41.1 billion — an increase of $1.3 billion over last year — with revenues estimated at $40.3 billion. The government expects to be back into a surplus by 2013-14.
The Sustainability Fund, the savings account the government has drawn upon heavily in recent budgets, sits at $3.7 billion, after another $3.7 billion was used this year.
The budget assumes a rosy economic outlook with forecasted economic growth of 3.8 per cent, a crude oil price of $99.25 a barrel, and unemployment rate lower than five per cent.
But the opposition believes the government is relying too heavily on predictions that may not come true.
"Within two years, we're going to have $50 billlion worth of revenues in total?" Wildrose Leader Danielle Smith asked. "These are fantasy land projections."
"They're overly optimistic and very rosy about the income Alberta's going to get," said Liberal leader Raj Sherman. Sherman wants to province to abandon the ten per cent flat tax and start asking for more from people who earn over $100,000 a year.
NDP leader Brian Mason said he wasn't surprised by what he saw in the budget and expects there will be cuts next year.
"They have over-optimistic revenue projections, especially with regard to bitumen royalties and oil royalties, gas royalties, and they're draining another $4 billion out of the Sustainability Fund ," he said.
"This kind of thing will prevent the kind of cuts that they don't want to see in an election but we're going to have to deal with them next year."
Revenue sources to be reviewed
There are no new taxes in the budget, but Liepert says that recent price volatility shows Alberta can no longer rely as much on energy resources as a source of government revenue.
He says Albertans have ideas about what the government can do — ideas bandied about at the meeting include so-called sin taxes, consumption taxes or a return to health premiums — but the talks won’t take place before this spring’s election.
Liepert bristled at suggestions that these discussions were being delayed on purpose.
"There is no hidden agenda here. Surely to goodness, talking to Albertans, listening to what Albertans have to say and then reacting to what Albertans have to say, is just smart politics," Liepert said.
"And so, if somebody is trying to draw a scenario that somehow, we’re going to after the election, come up with all these bogeyman theories, well, let them go ahead, because they’re going to be wrong."
Increases to AISH, Alberta Works recipients
The budget proposes increases for beneficiaries of a number of social programs
People who receive AISH (Assured Income for the Severely Handicapped) will see their benefits increase.
Recipients currently receive $1188 a month; starting April 1, monthly payments will be bumped up to $1,588, a $400 increase.
The amount of income AISH recipients are allowed to earn before their benefits are clawed-back will double: for a single person it increases from $400 to $800 a month.
People who receive income support under the Alberta Works program will receive an average increase of five per cent, the first gain since 2008.
The province is also proposing to raise the income threshold for people eligible to receive the full amount under the child subsidy program. For example, a single parent of a three-year-old child, who earns $50,000 a year or under, would receive a subsidy of $546 a month, instead of $132 under current rates.
The previous income cut-off for a full subsidy was $35,000 for a single parent.
Up to 4,000 Alberta families will see an increase in their benefits and an additional 3,000 to 5,000 families will now qualify.
The province plans to hire 55 new sheriffs to a bid to bolster courtroom security and 90 new RCMP officers — 30 this year, and 60 in 2013-14 — in locations to be determined by the RCMP commanding officer.
The budget also has money for 180 corrections officers and other staff for the new Edmonton Remand Centre.
The province is also devoting $11 million to set up the newly announced environmental monitoring program in the Alberta oilsands.
Other highlights include:
- 6 per cent increase to base operating funding for Alberta Health Services
- 3.4 per cent increase in operating funding for Education, bringing the budget to $6.2 billion
- $125 million in each of the next three years for family care clinics, addictions and mental health services and home care
- 6.6 per cent increase for the Alberta Seniors' Benefit
- $110 million for outreach support and housing for 1,800 homeless people, and more than 3,100 spaces in emergency and transitional shelters