The Progressive Conservative Party released its budget to mixed reviews on Thursday.
The budget predicts expenses at $41.1 billion and revenue at around $40.3 billion, for a deficit of $886 million. The government plans to dip into the Sustainability Fund to cover the deficit, leaving the fund with $3.7 billion.
“I think this is a very positive budget,” said Minister of Transportation Ray Danyluk, MLA for Lac La Biche-St. Paul-Two Hills. “It’s a commitment to Albertans by responsibly investing in programs in support of Alberta’s quality of life without raising taxes.”
The 2012 budget positions the province to balance the budget next year, he added.
The budget will improve access to healthcare, help the growing seniors population and ensure a better quality of life for the vulnerable, said Danyluk. The budget will also improve the education system, he said.
The government predicts revenue to grow 4.6 per cent, adding $1.8 billion, due primarly to higher tax revenue, federal transfers and investment income offset by slightly lower non-renewable resource and gaming revenue, the financial overview notes.
Danyluk previously called for more equitable health transfers for Alberta. The increased funding this year came with an announcement Alberta would move to per capita funding in 2013. Danyluk said he is happy with the premier’s work with the prime minister to change the funding formula.
“It will help support our health care. Our health care budget continues to grow, as well our health care needs continue to grow,” he said. The province gains 100,000 people every year, he added. “They don’t come with schools. They don’t come with health care, so we need to ensure somehow we are able to provide that service.”
“Without a doubt,” St. Paul and area will receive a share of the federal transfer increase, he said.
The government plans to invest $100 million to improve access to primary health care and mental health services, as well as to increase the maximum monthly living allowance for the Assured Income for the Severely Handicapped by $400 per month.
Local transportation priorities include finishing the pavement gap on Highway 646 by Fork Lake and Highway 631 south of Myrnam, as well as to continue twinning Highway 63 to Fort McMurray, said Danyluk.
Tax revenue is forecast at $17.9 billion, an increase of 8.7 per cent due to strong growth in personal and corporate income tax revenue, the financial overview indicates. Education property taxes remain the same, but because property values increased the province expects to collect $1.8 billion, a 6.5 per cent increase.
The government expects resource revenue to increase by 19 per cent per year and reach $16 billion in 2014-2015. The increase in revenue is due to initiatives in the oilsands, said Danyluk. “There were incentives for oil companies to develop in Fort McMurray and those incentives are coming off, so you’re going to have more royalties from that production.”
“They’re essentially predicting a 40 per cent increase in resource revenues over the next two years. They’re basing all of their projections on record oil prices and a massive increase to natural gas prices,” said local Wildrose Party candidate Shayne Saskiw, last week. “This type of spending isn’t sustainable.”
If oil prices dip, the government will blow through the entire Sustainability Fund and run record debt levels, he added.
The actual cash shortfall is $3.1 billion because the government did not account for infrastructure projects, “which we feel should be included in the deficit projections,” added Saskiw.
Local opposition party candidates slammed the PC budget and made preparations for a spring election campaign last week. Saskiw plans to open the Wildrose Party campaign office in St. Paul on 50 Avenue on Saturday.
The Wildrose Party released its budget alternative on Friday, which claimed would offer a $1.6 billion surplus and a $16 million cash surplus. Wildrose would increase operational spending by $854 million, a 2.5 per cent increase as opposed to the PC’s 6.9 per cent increase over 2011.
Wildrose would find most of its savings by cutting corporate welfare, said Saskiw, pointing to $2 billion used on carbon capture and underground storage, and the Alberta Venture Fund.
“Government shouldn’t be in the business of being in business … This is a question of priorities.”
Wildrose would also eliminate Alberta Enterprise Corporation to save $103 million and would dismantle Alberta Health Services, which it claims would save hundreds of millions of dollars “in inefficiencies.”
The Wildrose would try to save money by cutting back 30 per cent of cabinet salary, the amount wages increased in 2008 when MLAs voted for a pay hike, as well as eliminate the MLA severance packages, which can reach hundreds of thousands of dollars in payouts when MLAs leave office. The party would reduce the government worker to manager ratio, freeze management bonuses, freeze public sector salaries and reduce cabinet from 20 to 16 ministries.
Wildrose calls for $4.1 billion in new infrastructure, including twinning Highway 63, long term care facilities for seniors and urgently needed schools. The plan would delay capital projects for which “the government has no money to fully staff or maintain,” to save $1.6 billion.
PCs have raised spending by 91 per cent in the previous nine years, double the rate of inflation plus population growth, according to the alternative budget. The Sustainability Fund surpassed $16 billion in 2009-2010 but will be reduced to $3.7 billion.
Wildrose increases would include $800 million for 1,000 nurses, technicians and support staff in health care and $100 million to improve access to emergency rooms and doctors. Wildrose would match the $400 per month AISH increase and would budget $50 million for 1,000 senior care support works for home care, long term care and assisted living.
Alberta Liberals did not present an alternative budget but claimed they would offer “budget honesty while PCs hide behind a coward’s budget,” in a press release last week.
“With oil at a hundred bucks a barrel, everyone is wondering why this government has us over the barrel financially,” leader Raj Sherman said. Sherman claims a progressive tax and a rise in corporate tax are needed to address the deficit.
Over the next few years, there will be a huge increase in the oil generated in the Conklin area, said local Liberal candidate and Lac La Biche County Coun., John Nowak. He said the resource revenue projections of increase of 19 per cent per year are probably not off the board, but added, “I’m relatively distrustful of this government in general. That’s why I’m running against it. I don’t necessarily agree with the numbers they bring forward.”
Nowak said he supports Sherman’s call for taxes. “I think a little more tax on the industrial end of things, I think that’s definitely warranted if we want to become a more progressive province that puts an emphasis on our quality of life and health.”
The progressive tax would be a three per cent increase on taxable income between $100,000 and $150,000, five per cent on $150,000 to $200,000 and seven per cent on $200,000 and over.
He added he wants to see more fiscal conservatism.
“I’m seeing a province where our service level has deteriorated, our taxes remain still some of the best in the country, but for the average person I don’t think we’re getting the value for our dollar that we should be getting.”
Nowak wants to see government programs restructured to get rid of a “really thick middle layer of management.”
“I think we have to really look at restructuring the government and getting rid of that layer of bureaucracy,” Nowak said.
Nowak plans to host a meet and greet at the St. Paul Legion on Feb. 23 at 7 p.m.