by Colin F. Smith
Edmonton – Good news is how local MLA Maureen Kubinec describes the provincial budget introduced Thursday.
Heralded as the first balanced budget in six years, it anticipates the highest-ever government revenues at $44 billion, with operational spending set for $40.4 billion.
A portion of the surplus is going toward capital spending, which will be $6.6 billion this year, while the province is borrowing another $5.1 billion to cover the cost of the planned spending on new and rehabilitated infrastructure.
Over the next three years $19.2 billion will be spent on roads, schools and other infrastructure, about two-thirds of it borrowed it.
The government says the spending is necessary to provide for Alberta’s fast-growing population, rising at a rate of about 100,000 people each year.
The Conservatives’ willingness to take on debt has been decried, notably by the Wildrose party. Kubinec rejects the criticism, making an analogy to the family farm in the Linaria area near Westlock she and her husband operate.
“Had we not used debt wisely, our farm would not have grown,” she said. “Machinery, some of it very expensive is paid over five years, land over 15 years. To me, when you are in growing you can use debt wisely.”
The infrastructure investment is needed because of the pressures of growth, Kubinec indicated.
“There were 105,000 people moving here last year. They need schools and roads, they need infrastructure.”
She added that the province has a carefully worked-out plan for repaying the borrowed money.
“The money for payments on the loans comes off the top.”
Kubinec said specific budget spending in the local area will include $3 million for Alberta Municipal Water/Wastewater partnerships.
There will also be “significant” funding for road rehabilitation, preservation and paving projects, although construction of Cardiff overpass is not presently in the cards.
The Barrhead-Morinville-Westlock MLA also pointed to funding for modernization of Sturgeon Composite, among other school projects supported by the budget, although these had been announced earlier.
The lack of further money for K-12 education has disappointed school boards and the Alberta Teachers’ Association, but Kubinec says that the government can only do so much.
“We have to balance that need with being within our budget.”
Kubinec noted that last fall Finance Minister Fred Horne was in Barrhead for budget consultations, at which he asked questions about policy priorities.
“I see those conversations reflected in the budget,” she said. “We’re faced with growth pressures. It’s exciting but it’s also challenging. We’re working very hard to use the money Albertans have entrusted us with wisely.”
Morinville mayor Lisa Holmes said she was happy to see the continued Municipal Sustainability Initiative (MSI) capital funding provided in the budget.
“It is essential that the province continue to focus on helping municipalities renovate and rebuild aging infrastructure in order to keep up with our high rates of growth,” Holmes said.
“I can also see opportunities for our community to access funds under the new Alberta Community Partnership Fund as we have the potential for many regional projects to move forward in the next year. I am looking forward to receiving more details on the 63 per cent increase in funding for highway rehabilitation.”
The 2014 budget sees no new taxes or rate increases. Population growth, a strong economy and higher wages will result in higher tax revenue, and the provincial treasury is also benefiting from higher energy prices and a lower Canadian dollar.
Spending will rise 3.7 per cent over the last fiscal year, with $18.3 billion going to healthcare spending and $6.5 to education spending. Capital spending includes $1.8 billion for school projects.
During the next three years construction of 155 K-12 schools is planned, along with seven post-secondary projects, 24 health facility projects, 258 kilometres of new or twinned highways and 2,500 kilometres of rehabilitated highways.
“Alberta is the fastest growing province in the country, and we can’t afford to stop building,” said Premier Alison Redford. “Under our Building Alberta Plan, we are meeting the challenge of enormous growth head-on, while focusing every day on making Albertans’ quality of life even better.”
The government is also putting money into savings, which are are expected to be $23.9 billion by the end of the 2014-15 fiscal year; $26 billion by the end of 2016-17.
Two new endowments within the Alberta Heritage Savings Trust Fund are intended to encourage social and agricultural innovation. The Heritage Scholarship Fund will be enhanced to support students exploring opportunities in the trades.
There will also be a new Alberta Future Fund to provide funding for unspecified “future strategic opportunities offering long-term benefits to Albertans and the Alberta economy.”
The borrowing set out in the budget was strongly criticized by the Wildrose.
“It would have been so easy for them to balance the budget, stay out of debt and instead they’re doubling down,” said Danielle Smith, leader of the Official Opposition party. “They are going to be burying us in an avalanche of debt by 2016.”
New Democrat leader Brian Mason said the budget provided little benefit for the majority of Albertans.
“If you are at the top of the food chain in Alberta you’re going to do very well,” he said. “But if you’re in the middle class or you’re poor you’re really going to be squeezed by this budget.”
Mason mentioned a lack of reinvestment in post-secondary education despite a $147 cut last year, no funding for full-day kindergarten, a $120 million cut from seniors’ drug benefits and the continuation of a flat tax.
The 2014 budget is bad news, according to Raj Sherman, head of the Alberta Liberals.
“The Redford Conservatives continue to jack up debt while failing to provide adequate funding for vital programs and services,” Sherman said.
“Classrooms are overcrowded, patients suffer with long healthcare wait times, post-secondary education is still a debt sentence and our seniors lack affordable drugs and living accommodations.”