Despite promises of additional funding in a number of areas, local municipal officials are holding off on the celebration as they wait to see when or if the Lakeland will benefit from the provincial budget.
“The devil's going to be in the details. There were a number of initiatives in terms of roads and infrastructure like water and sewer,” said Bonnyville Mayor Gene Sobolewski. “They highlighted the major (projects) but then they also had these categories of lump sum items. I don't know what those are, so again we're going to need a little more detail.”
The provincial NDP government officially tabled their first budget last week, with it comes a change in both corporate and income tax, increased funding levels and a major deficit.
“I think parts of it are good but I do have mixed feelings about going into debt as far as we're going to go in the next five years. They're talking about almost a $50 billion debt by the year 2020, that's as high as the federal government is thinking of going into debt,” said MD of Bonnyville Reeve Ed Rondeau.
Rondeau added, “People tend to say that very quickly and don't think too much of it. When you take that and break it down per capita (I haven't done it yet) but I can imagine that's going to be a huge number that every rate payer in Alberta is going to have to be responsible for.”
Back in March, many Albertans were up in arms over the former PC government's budget. During the election the NDP campaigned that, if elected, they would throw out the flat rate income tax, and restore dollars for healthcare and education. They didn't go above and beyond their promises, but instead stuck precisely to their election platforms.
One detail that has shifted, is Finance Minister Joe Ceci's announcement that the province's budget now won't be balanced until the year 2020. Starting this year, the government is projecting a $6.1 billion deficit. In 2016/'17 the deficit is expected to be $5.4 billion, in 2017/'18 there will be a $4.4 billion deficit and in 2018/'19 Alberta will have a final deficit of $2.1 billion.
“I agree with doing the borrowing and I've been advocating that for the last two years, more than that now. I've been advocating borrowing for critical infrastructure because of the infrastructure debt that's been shouldered by municipalities for the last 15 years. There's been a constant putting more and more emphasis and responsibilities on municipalities and downloading from the higher government,” said Sobolewski. “I'm not necessarily in agreement with borrowing for operating, but then again when the slush funds are drained down because they've been used in the past – but it's got to be a controlled borrow.”
During his speech, Ceci cited a drop in resource royalties from $8.9 billion last year to just $2.8 billion this year as the reason for the deficit.
Most of that borrowing will be put towards infrastructure, with $34 billion going to infrastructure projects over the next five-years, including $4.4 billion for new projects and programs. The capital plan commits $8.6 billion to municipal infrastructure, $706 million to water and wastewater management, and $454 million to community facilities.
Funding to the Municipal Sustainability Initiative (MSI) was increased by just $100 million, for a total of $3.9 billion over five-years.
“The MSI, I'm glad to see it went up. What does that mean to us? Probably very little because the cities will get the majority of it. What we're going to see out of that as individual municipalities is probably very minimal in our MSI funding,” said Rondeau, adding that they're going to continue to push for the regional waterline.
“We've applied and we're in a position where we want to do the study to determine how it's going to be done and where it's going to go, how it's going to be governed. The town's going to be pushing for it and we're going to be pushing for it, too.”
Another project that the area will be working to see some funds on is the Bonnyville hospital. While it wasn't included in the initial list of health facilities up for renovations, still Sobolewski is pleased to see that at least there's money there.
“The constant redirect in the past 10 years is that there's no money, no money, no money. Now, it's just the matter of doing the work necessary and the lobbying to get our hospital on that list. We've had a lot of discussions and we're going to continue having discussions with ministers and officials to get our hospital on that list,” said Sobolewski.
The much-maligned Highway 28 will be getting some attention from the province, from the Highway 63 turnoff heading towards Edmonton. While the improvements won't be making their way this far east along Hwy. 28 quite yet, local politicians are hopeful.
“I think between Bonnyville and Cold Lake is going to be a priority based on the traffic count, but we have to make sure we get into the cue. For example, if we had other roads that were done, like Hwy. 45 and Hwy. 897, if they had an overlay put on them and then nothing had been done on Hwy. 28 (maybe the government would see the need),” said Sobolewski.
Rondeau agreed that Hwy. 28 needs to be fixed, but isn't convinced twinning the highway is the best solution.
“Do we need a twinned highway from Cold Lake going all the way to Hwy. 63? I know there's a lot of traffic on that road; we need an overlay, we need some passing lanes but the money isn't limitless. If we want a twinned highway we're going to have to pay for it.”
Albertans will see their wallets directly affected by the provincial government's budget, with the introduction of a new progressive income tax system. Instead of the flat 10 per cent income tax, high earners will be paying more in taxes while lower earners get a break.
“I can understand the flat tax but I can also understand their current proposal in terms of deficits and making it fair for everybody. I haven't really got a position one way or another,” said Sobolewski. “Again, the devil's going to be in the details: how they're implementing it and how they're actually calculating it.”
Rondeau echoed that sentiment, “I think it might make some sense. On a flat line tax rate everybody pays the same no matter how much you make...people that make less money pay the same rate as people who make more money, so it probably has some value. It remains to be seen when they're going to start it and how much they're going to start it at.”
Business owners will especially see the impact. Along with the income tax changes, the corporate tax rate will be put up to 12 per cent. At the same time, in an effort to help create jobs in the province, Ceci announced a job creation incentive that offers businesses $5,000 for each job created.
Other highlights of the budget include an additional $525 million in drought and wildfire relief, a two-year post-secondary tuition freeze, the restoration of education and healthcare dollars, $15 million to women's shelters and an additional $25 million to FCSS. The provincial government also froze the salaries of MLAs and cabinet ministers for the entire term.
Those who purchase cigarettes or alcohol have probably already noticed they have gone up in price. Included in the budget announcement was a $5 per carton increase on cigarettes, a 750 ml bottle of hard liquor costs 18 cents more, and the price for a case of beer also went up 21 cents.
