Views that never cease

Alberta Budget : ‘Hope is not a Strategy’ - Dr P R Kalia

‘In 6-7 years Happy Days will be here again’, Believes Alberta FM Joe Ceci

The 2017-18 Provincial Budget unveiled Thursday, March 16, by Finance Minister Joe Ceci lacks specific details about how the NDP government plans to return the province to a balanced budget or to start paying off the debt.

Alberta’s debt is projected to soar to $45 billion in the coming year as the NDP government continues to borrow heavily to finance operations and build infrastructure. And by 2019-20, debt would rack up to $71-billion that will cost Albertans $2.3 billion in annual interest payments.

Joe Ceci BELIVES the Alberta government will be back in the black in six or seven years. He feels one day “we will get to balance.  Once we get to balance and run surpluses we will pay down the debt. Once we pay down the debt happy days will be here again.”

There were very few surprises when Finance Minister stood to table the New Democratic Party’s third budget since forming government in 2015.

As we know, Rachel Notley‘s NDP government rejected the kinds of conservative fiscal policies that created the infrastructure deficit Alberta has today. The government continues to make significant investment in public infrastructure, which was long overdue in Alberta. Along with a new hospital in Edmonton, the budget includes funding for renovations at the Misericordia Hospital and new construction at the Royal Alexandra and Glenrose hospitals.

For many years, the Alberta government became over-dependent on oil and natural gas royalties to pay for a large portion of the daily operations of government. The old PC government used those high royalty revenues to subsidize corporate and personal tax cuts, which proved politically popular in the short-term but financial irresponsible in the long-term. When the international price of oil dropped in 2014, so did about $10 billion worth of expected government revenue.

The NDP took some steps to diversify revenue with moderate increases to corporate and personal taxes after they were elected in 2015 but it was nowhere enough to fill the revenue shortfall. The positive news is that Alberta still has the advantage of having a low debt-to-GDP ratio, which means at least in the short-term province, should be able to deal with being in a deficit situation.


Opposition parties reacted swiftly to the Alberta NDP government’s 2017 budget. A Wildrose opposition called the budget “a debt-fueled disaster” and the Progressive Conservatives claimed it took Alberta over a “fiscal cliff.” While Alberta Party leader Greg Clark claimed the budget was “uninspired, irresponsible and focused only on the short term.” Also not surprising was the response from Liberal leader David Swann, who took a more reasoned approach by applauding the government on investing in public services and infrastructure, and then pointing out where the budget failed.

The mayors of Alberta’s two largest cities have long lobbied for more funding for municipalities to help pay for affordable housing initiatives, infrastructure and public transit improvements. “This provincial budget is encouraging news for Edmonton,” Edmonton Mayor Don Iveson said in a Facebook post in reaction to the budget. “I wasn’t really expecting much from this budget given the fiscal situation with the province,” Calgary Mayor Naheed Nenshi said. “I had some high hopes; clearly the high hopes were not met.”  He also said he was pleased to see considerable dollars from the carbon levy be earmarked for transit funding.

The 2017 budget saw a number of investments in education, including a promise to increase funding to match enrolment, build 10 new schools and upgrade or replace another 16. School fees paid by parents are also being cut by $54 million.

“Edmonton Public Schools is pleased to see a steady commitment to education in this budget,” EPSB Chair Michelle Draper said in a statement. The Alberta School Boards Association (ASBA) said it “welcomes the Alberta government’s commitment to funding new student enrolment growth.” Overall, this budget reflects good news for students,” Dexter Bruneau, chair of the Council of Alberta University Students and vice-president external for the Students’ Association of Mount Royal University, said in a statement.

The Calgary Chamber said it was disappointed to see “fiscal discipline and additional support for innovation and entrepreneurship was not high on the agenda.” The Edmonton Chamber of Commerce criticized the province’s plan, pointing out it has “a massive deficit for the third year in a row.”

Overall, the NDP is not heeding the calls of the conservative opposition parties to make deep funding cuts to public services and infrastructure investments, which would be detrimental to Albertans’ quality of life during this economic downturn.

But, in the presence of endless deficits and ballooning debt, one question that remains unanswered is how in the long-term, the government plans to deal with the revenue shortfall created by the drop in the international price of oil.

[Here are highlights: Revenue is forecast to hit $45 billion; The deficit is pegged at $10.3 billion; Tax revenue is forecast at $21.8 billion, up almost 6 per cent from year prior; Bitumen royalties are estimated at $2.5 billion while conventional oil royalties are pegged at $476 million; Operational spending is growing by 2.2 per cent; There is $4.5 billion earmarked over the next four years for infrastructure, including $100 million in new money to help First Nations get access to clean water; A new hospital in Edmonton at a cost of $400 million; A new continuing care centre in Calgary at a cost of $131 million; Red Deer is getting a new court house at a cost of $97 million; here is $14.5 million in the budget to hire more Crown prosecutors and support staff; Education funding hits $8.2 billion with money for 10 new schools and 16 more replacements and modernizations; There is $566 million over the next three years for a variety of programs to help lower energy bills

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