Alberta budget forecasts $3.4 billion deficit

By Staff

Edmonton – Finance Minister Lloyd Snelgrove presented the Stelmach government’s final budget Thursday afternoon, a document the newly-minted minister called a responsible budget that combines restraint with compassion.

The 2011 provincial budget forecasts a $3.4 billion deficit; the difference between the $35.6 billion the Stelmach government anticipates taking in and the $39 billion it anticipates the province’s expenses will be over the next year. As was the case last year, the deficit will be covered from the province’s Sustainability Fund.

Priority areas of the 2011-2012 budget call for $545 million (a 6.6 per cent increase) in funding to Alberta Health Services as part of a five-year funding commitment introduced in 2010. Snelgrove said healthcare spending will create 360 new hospital beds, 3,000 more surgeries, and home care services for an additional 3,000 Albertans. The new budget calls for $14.9 billion in healthcare spending.

The province is also looking to inject an additional $257 million to support the province’s school boards, and a $62 million increase to operating grants for post-secondary institutions.

Children and youth programs are set to receive a $39 million operating increase. Funding will go to programs, including child intervention services, child care and family support for children with disabilities.

Public infrastructure spending is targeted to be $6.6 billion, part of a $17.6 billion commitment over the next three years.

Snelgrove said the government under Premier Stelmach – faced with a recession – made the right decision to keep building, a decision it is continuing in the present budget.

“Let’s be very clear. These deficits are the result of our commitment to build the hospitals, schools and highways in this province,” Snelgrove said.

Those deficits have and will continue to be covered from the savings the province set aside in more prosperous years through its Sustainability Fund. The government is anticipating dipping further into that fund to cover expected deficits in 2012-2013, and are anticipating a return to surplus status in 2013-2014.

“We created and built the Sustainability Fund when times were good, which has allowed us to preserve and even enhance funding to priority services like health and education, even in the depths of recession,” Snelgrove said in a release issued after the budget was tabled. “It has also allowed us to continue building the roads, schools, and hospitals that we need today, and that we’ll continue to need as the province returns to growth.”

Parties critical of budget

The Wildrose Party called the government’s budget another black eye budget from the big-spending PCs.

“Last year’s budget was a train wreck, and this year the cars just keep piling up,” said Wildrose leader Danielle Smith in a release Thurdsday. “This government has broken their promise to be the first province out of deficit. They’ve raided our savings to the point of extinction. These guys have splashed red ink all over what used to be the best financial statement in the country. It is only now that our savings are nearly completely blown that they have accepted our proposal to limit year over year spending growth.”

The parties finance critic Rob Anderson said the province’s actual 2011-2012 deficit is $6.1 billion because the Tories had not included $2.7 billion targeted for infrastructure spending.

“They now have plans to borrow $2.6 billion in new debt by year’s end – that’s $2.6 billion they are saddling the next generation with,” Anderson said in the same release. What a sad legacy to leave our children. This is the new normal of debt and deficits and Albertans aren’t going to forget about it.”

The Wildrose claim the PCs deficit budget amounts to $912 per Albertan based on the projected $3.4 billion deficit and $1,644 per Albertan based on what the Wildrose see as the true numbers.

But not all parties were as critical of the budget as the Wildrose.

Alberta Party MLA Dave Taylor said no longer being part of the official opposition he no longer had to set his hair on fire with righteous indignation over the budget.

“Let’s be honest; Lloyd Snelgrove’s budget wasn’t all that bad,” Taylor said in a posting on the Alberta Party’s website Thursday afternoon. “It wasn’t all that good, either. It was, in fact, pretty uninspiring – a stay-the-course budget produced by a government that’s not very good at setting priorities or articulating which course they’re actually trying to follow. But it’ll keep the lights on for the next year while making some modest improvements along a couple of the margins.

Taylor went on to suggest what the Alberta Party would do differently if it were preparing the budget. Those things would include building the budget in collaboration with Albertans, moving to a five-year budget cycle that extends past the typical four-year election cycle, practicing proactive spending and making municipalities an equal order of government to the province. Additionally, Taylor said the Party would start saving money again by saving one third of revenues, spending one third on capital and program investments and the remaining third on the province’s day-to-day expenses.

The legislature is set to debate the budget early next week.

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