Local MLA and Finance Critic Rob Anderson says “Alberta’s debt by the next election will be $16 billion.”
The comment was tweeted in response to the Redford government’s budget release of the 2013 budget at the Alberta Legislature, in the late afternoon of March 7.
The budget revealed operating expenses will remain the same as last year’s forecasted $36.4 billion, lower than the average annual increase in operating expense of 7.3 per cent over the past 10 years.
Despite the forecasted $7.3 billion drop in non-renewable resources, the document promises no new taxes or tax rate increases.
Capital expenses will be $15 billion over the next three years, with $5.2 billion in each of the next two years and $4.7 billion in 2015-16.
New projects over the next three years will include 50 new schools at an expected cost of $503 million, $282 million for new post-secondary facilities at the Northern Alberta Institute of Technology, NorQuest College, University of Calgary, Lethbridge College and Mount Royal University, and $442 million to twin sections of Highway 63.
“The new capital plan continues to build Alberta in a way that will meet the needs of the province for generations,” said Doug Horner, Alberta’s minister of finance. “With Alberta’s population growing by 95,000 people last year alone, and the province poised to grow to more than five million people within the next 20 years - we need to be ready for the future.”
Chestermere-Rocky View MLA and Education Critic Bruce McAllister said despite the rhetoric, there is not likely to be any school announcements in the near future.
“From what they are saying, it will likely be (at least) five or six years,” he said, adding post-secondary funding has also been cut by a reported $147 million.
McAllister called the budget presentation “one of the most confusing” in Alberta’s history, saying the Wildrose opposition’s numbers look very different from those announced by the Redford government.
Anderson agreed.
He said there will be a total of $3.5 billion in new debt, which added to the $2 billion taken from the Sustainability Fund to cover costs, adds to a $5.5 billion in expenses over revenue.
“It’s the back-in-debt budget,” said Anderson. “All the work Albertans have done since 2005 to be debt free is being wasted by the (Redford government).”
Budget 2013 also calls for $2.5 billion for municipalities over the next three years, $2.1 billion for health-care facilities, including hospitals, family care clinics, cancer centres, supportive living and long-term care.
The province is also planning to spend $1.2 billion to maintain aging schools, roads, health facilities, water infrastructure, post-secondary institutions and provincial parks.
In 2013-14, $4.3 billion of the capital plan will be funded through direct borrowing, according to press release from the Province.
Anderson noted last dollar spent on infrastructure projects for the foreseeable future will come from debt.
“This is the greatest squandering of wealth in our province’s history,” Anderson said. “This government talks about living within its means, but it is spending so far beyond its ability that our children are going to forced to pay their bills. Premier Redford is taking Alberta down a dark path, one that we’ve been down before, and we know where it leads.”
Total revenues for 2013-14 are estimated at $38.6 billion, $5.4 billion lower than the Budget 2012 forecast.
According to the Province, the lower revenues are a result of “The Bitumen Bubble” a term coined by Redford’s government to explain the cost differential between conventional oil prices and heavy crude taken from Alberta’s oilsands.
“The Bitumen Bubble continues to a have a severe impact on our revenues,” said Doug Horner, Alberta’s finance minister, in a press release. “Budget 2013 delivers the tough, but thoughtful decisions necessary to adapt to our current reality.”
An operational deficit of $451 million is expected for 2013-14. The money will be taken from the Sustainability Fund, bringing the numbers from about $17 billion five years ago to about $6990 million now.
“Alberta is the greatest place in Canada to live - the reason why our population is growing by 100,000 people each year. But even Alberta is not immune from global economic challenges. Our budget thoughtfully responds to the effects of the Bitumen Bubble, while living within our means and continuing to build the schools, health centres and roads Alberta needs,” said Premier Alison Redford.
Budget 2013 also introduces and annual, legislated savings strategy for Alberta.
Starting in 2014, a portion of non-renewable resource revenue will be set aside into savings. The plan also includes a retention of 30 per cent of the Alberta Heritage Savings Trust Fund’s net investment income 2014-15.
“Albertans told us we needed to save in good years and in bad,” said Horner. “We are putting into law today that commitment, ensuring we’re providing for future generations.”
Anderson also criticized the government’s new borrowing-to-save policy.
“Saving money is a great idea as long as you’re not going into debt to do it,” Anderson said. “That’s like taking out a second mortgage to invest in an RRSP. It’s an absolutely foolish policy that makes no economic sense.”
To view the budget, visit www.finance.alberta.ca
