UCP unveils budget it says secures Alberta’s future

Revenue

Total revenue for 2023-24 is estimated at $70.7 billion, $5.4 billion lower than last year. The main reason for the decrease is that revenue in 2022 reached a record $76 billion because of unexpectantly high oil and natural gas prices stemming from Russia’s invasion of the Ukraine.

Energy prices have since dampened because the global economy has been hit with severe inflation, interest rate hikes and the risk of recession. The West Texas Intermediate price is expected to average around $US79/barrel.

Non-renewable resource revenue is estimated to be $18.4 billion in 2023-24, down from the highest-ever resource revenue of $27.5 billion forecast in 2022-23.

Tax revenue is forecast at $25 billion, making up 35 per cent of total revenue.

Fuel tax relief and full indexation of the personal income tax system in 2022 are factors restraining revenue growth, according to the government’s budget documents

Expense

The government’s total operating expense will be $63.8 billion dollars, $1.7 billion higher than the 2022-23 forecast, which is expected to grow by approximately two per cent over the following two years. The finance minister says these targeted increases will fund important investments to ensure Alberta continues to be the best place to live, work, and raise a family.

Energy and economic assumptions

West Texas Intermediate oil (USD/bbl) $79.00
Western Canadian Select @ Hardisty (CND/bbl) $78.00
Light-heavy differential (USD/bbl) $19.50
Natural gas (CND/GJ) $4.10
Convention crude production (000s barrels/day) 497
Raw bitumen production (000s barrels/day) 3,345
Canadian dollar exchange rate (USD/CDN) $76.20
Interest rate (10-year Canada bonds, per cent) 3.60

The province says Alberta’s economy is continuing to expand following two years of robust post-pandemic recovery. Alberta is expected to lead the country in GDP growth with a forecasted rise of 2.8 per cent. Population growth is projected to rise to its fastest pace since 2006 and the government is anticipating this will support residential construction activity. However, rising borrowing costs and elevated prices are expected to impact consumer spending and non-energy business investment.

Health Care

The UCP is setting a new record for health-care spending in 2023-24. An additional $965 million is being allocated to improving ambulance response times, decreasing emergency room wait times, reducing wait times for surgeries, and attracting more front-line health workers.

The government has budgeted $158 million to attract, recruit and train more doctors and nurses with a focus on family physicians in rural areas. Another $336 million over three years will help to strengthen EMS services.

Mental Health and Addiction

The budget is allocating money to reduce wait times for mental health and addiction services as well as address gaps in the system. $148 million is being allocated in Budget 2023. Over the next three years, the UCP says it will also invest $155 million in capital funding so Albertans can access detox services, treatment medications, peer support, and help with skills and training.

Minister of Mental Health and Addictions Nicholas Milliken says, “Alberta has emerged as a national leader in building out recovery-oriented systems of care for addiction and mental health. The historic investments included in Budget 2023 will help us further expand treatment and recovery services, enabling us to support more Albertans in their pursuit of recovery.”

Supporting Albertans, Students and Families

With $2.3 billion in affordability measures in 2023-24, $1.5 billion in 2024-25, and another $1.8 billion in 2025-26, the government says it is keeping more money in the pockets of Albertans. New relief measures will save post-secondary students about $18 million each year with lower interest rates for student loans.

Adoptive families will have access to more subsidies and tax breaks to make adoption more feasible.

Workers in the social services sector will see their wages increased by 10 per cent so they can continue to provide services to people with complex needs, those experiencing homelessness or family violence.

Personal income taxes are being indexed to inflation and the government has decided to fully pause the collection of the 13-cent provincial fuel tax until June 30, 2023. Albertans will also receive a larger tax credit when they donate to charities.

K to 12 Education
One of the largest-ever population increases in 2022 has resulted in more students attending Alberta schools. Funding to school authorities is being increased by $820 million to support enrolment growth over the next three years.

There is also $126 million over three years to increase staffing in schools. School authorities can hire more educational assistants, increase their hours, provide more training opportunities, or bring in more specialists like counsellors and psychologists.

Funding for school buses is being increased by $414 million over three years to make improvements and offset rising costs. An additional 80,000 students will be eligible for provincial funding support.

Post-Secondary Education

The provincial government says it is making post-secondary education more affordable by reducing interest rates on student loans from prime plus one per cent to prime, extending the loan grace period from six months to one year following graduation, and capping tuition increases at two per cent annually, effective in 2024.

Public Safety

The budget for public security is being increased by $84 million from the budget forecast. The money aims to expand policing options and the sheriff’s branch to help municipalities fight crime.

Minister of Public Safety and Emergency Services Mike Ellis says, “By working with various levels of government and Indigenous organizations with a shared goal of increasing safety for Albertans, trust is built between the public and the police that serve their community.”*

$12.5 million in 203-24 to support the expansion of therapeutic living units within provincial correctional facilities to help inmates access recovery-oriented treatment and recovery programs.
$65 million over the next three years will strengthen First Nations policing to address the unique needs of their communities and members. This will secure new policing positions and the creation of another First Nations police service in addition to the Lakeshore Regional Police Service, the Blood Tribe Police Service, and Tsuut’ina Nation Police Service.
$20 million over three years to combat human trafficking and ensure necessary resources are provided to survivors and victims.

Capital Plan

The province is investing almost $23 billion to build and maintain public infrastructure. The capital plan includes:

$6.5 billion for municipal infrastructure;
$3.5 billion for capital maintenance and renewal;
•$3.1 billion for health facilities;• $2.3 billion for roads and bridges;
$1.6 billion for schools;
$1.1 billion for agriculture and natural resources;
$3.2 billion for other Capital Plan envelopes; and
$1.7 billion in SUCH sector self-financed capital spending.

New Fiscal Framework

The provincial government is also announcing a new fiscal framework that aims to address historical volatility in the economy and government revenues. There are four key components to this new framework:

Require annual balanced budgets, with certain exceptions;•
Limit year-over-year increases in operating expense to population growthand inflation;•
Limit in-year expense growth to a budgeted and voted contingency;
Set out policies for the allocation of surplus cash to repayment of maturing debt, saving for the future, or one-time initiatives that do not lead to permanent increases in government spending.

The government also plans to introduce amendments to the Alberta Heritage SavingsTrust Fund that will see it retain 100 per cent of its net income. The current requirement are to only retain an amount for inflation-proofing.

by Regan Tate

UCP unveils budget it says secures Alberta’s future

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