Alberta budget surplus slides by $2B, investments in safety and health continue

Experts call budget 'election friendly' Albertans will head to the polls in May, and experts say Tuesday's budget is election friendly. Nahreman Issa has the details.

Alberta's 2023 budget continues affordability measures and targeted investments in public safety, health care, and education as the projected surplus declined by $2 billion for 2022-23.

On Tuesday, Finance Minister Travis Toews tabled the next provincial budget, which focuses on paying down debt and establishing new fiscal rules, improving public safety while increasing investments in health care and education.

Budget 2023, which acts as the third quarter update for fiscal year 2022-23, forecasts Alberta's surplus at $10.3 billion — down from the summer prediction of $12.3 billion.

The province attributes that decrease to the introduction of the fuel tax holiday, lower royalties from bitumen in addition to higher spending, with more than a billion spent on agricultural disasters.

Total revenue is estimated at almost $71 billion for 2023-24, approximately $5.4 billion lower than Alberta's record forecast of $76 billion last fiscal year.

After last fiscal year's "strong" 4.8 per cent real gross domestic product (GDP), the province forecasts an increase of roughly half of that.

In 2024, real GDP is predicted to rise to three per cent and sit at an average of 2.9 per cent between 2025 and 2026.

While inflationary pressures are expected to "slowly" abate this year, provincial officials project it to hit the province the strongest in the first two quarters of 2023.

Over the next three years, Budget 2023 allocates $23 billion in capital spending, with more than half of that being spent on roads. That will include $430 million for Calgary's Deerfoot Trail upgrades and $94 million for the twinning of Highway 3 from Taber to Burdett.

Last fiscal update, the province forecasted a $5.7 billion surplus for 2023-24. The budget has now updated that to $2.4 billion, with a $2 billion surplus in 2024-25 and $1.4 billion the year after.

AFFORDABILITY MEASURES CONTINUE

Toews says this budget builds off the surgical approach to reducing expenditures and efforts to bring "Alberta's fiscal house" back in order the United Conservative Party-led government started in 2019.

"We didn't take the Ralph Klein approach of doing it in one year, of 20 per cent cuts," Toews said. "We took four years to do it, which we believed would be easier on Albertans."

The budget makes no mention of creating an Alberta pension fund. It keeps personal and corporate income taxes largely steady while re-indexing them to inflation, which provincial officials believe will mean more Albertans will receive a tax refund this spring.

The fuel tax holiday will continue into June 2023, with the province forgoing a projected $1.7 billion in revenue since it started last year. Starting in July, fuel tax rates will be determined on a quarterly basis using the average oil price and only providing relief when oil soars.

Monthly rebates for electricity will continue into April 2023. The province's natural gas rebate program will be made permanent, the province says, with the rebate provided when prices exceed $6.50 per gigajoule.

"Budget 2023 is securing Alberta's advantage," Toews added. "Funding in this budget will drive more investment, more job creation, more population growth and more opportunities for Albertans to find well-paying jobs."

PUBLIC SAFETY INVESTMENTS

Twenty-seven million dollars will be spent on hiring more than 200 Alberta Sheriffs to enhance highway patrols, courtroom security, and public safety initiatives like the Safer Communities and Neighbourhoods unit.

The budget does not allocate any money for a provincial police force, but about $27 million is set aside for municipalities to consider alternate policing options from RCMP.

When asked by reporters if hiring more Sheriffs is paving the way for provincial police service, Toews said that the province is focused on improving enforcement and reducing crime.

An Alberta Office to Combat Trafficking in Persons and a centre of excellence to enable human trafficking research will be created, with $20 million allocated for the next three years to provide help to survivors.

Over the next three years, $111 million will go toward creating more therapeutic living spaces at Alberta correctional facilities.

"We are improving safety and security in our communities while responding to the needs of vulnerable populations," Toews said.

The budget includes $22 million over three years to "address safety concerns" at Highway 16A and Range Road 20. Further details are expected to be released in the coming weeks.

HEALTH SPENDING

Health-care funding will be boosted by 4.1 per cent, around $965 million, since the last fiscal update. Toews says that will be directed toward reducing emergency wait times and improving ambulance response.

The Alberta surgical initiative — which uses for-profit clinics to expand surgical capacity — will receive $237 million over three years, including a boost of $120 million in new funding for several cities and towns across the province.

To improve the ability of Alberta pharmacies to produce compound drugs, the province set aside $54 million over the next three years to either renovate or upgrade 33 facilties.

The Ministry of Health will have $18 million for the budget cycle to plan new health projects, including:

The budget fully funds the new agreement the province reached with the Alberta Medical Association to the tune of $250 million, including increasing recruitment and retention programs for rural physicians.

In addition, the budget provides enough funding to increase the number of available post-secondary seats in nursing programs by 1,800 and another 120 seats for physicians to increase the number of frontline health-care workers.

EDUCATION FUNDING

Budget 2023 allots more than $820 million for the next three years to help school boards prepare for enrolment growth.

Another $1.5 billion in learning support will be spent in 2023-24 to help children with specialized learning needs and help hire up to 3,000 education staff, including teachers, educational assistants and support staff.

The province has put forward funding for 58 school projects, including planning funds for 14 future schools. Funding for school projects will go toward public and Catholic divisions, in addition to charter and collegiate schools to "support choice" in education.

Another $414 million will be spent over the next three years to reduce rural school bus ride times and provide support to drivers to offset rising training costs.

MORE AFFORDABILITY AND HEALTH CARE MEASURES NEEDED: NDP

The Official Opposition said the provincial budget sidelined the "real priorities" of many Albertans.

"Most programs under their so-called affordability plan have an expiry plan right after the election date," said Rachel Notley, NDP leader.

Notley criticized the budget for insufficient new spending on health-care worker retention. She said the current spending levels proposed by Premier Danielle Smith's first budget are half of what the Opposition would spend if elected.

"Overall, Danielle Smith is refusing to do the hard work necessary to protect and strengthen public health," the NDP leader said. "It's a budget that Albertans can't count on."

She also wanted to see more diversification credits to help the growing tech and agriculture sectors.

"We will build a resilient economy that creates good-paying jobs for generations to come," she added.

Political scientist Lori Williams said it was noteworthy that the budget did not fund two major pieces of Danielle Smith's leadership campaign.

"If people wonder about their pensions," she told CTV News Edmonton, "or if the province is going ahead with a police force.

"That's a lot of questions for things that aren't popular, and if those questions aren't adequately answered, I am not sure the money [new spending in the budget] is going to be enough to win folks over."