Alberta going deeper in debt, unveils budget

By ,Edmonton SunFirst posted: | Updated:

The Tory government has dug Albertans deeper in debt with the 2013-2014 budget it unveiled Thursday.

It plans to run a deficit of close to $2 billion and then borrow $4.3 billion for infrastructure — roads, schools, and hospitals.

That’s to make up what Finance Minister Doug Horner calls a $6.2 billion “cash requirement.”

“We’re in a deficit — I’m not hiding the fact that we’re in a deficit,” said Horner.

“We are having a tough time here. We could have cut another billion dollars out, but that’s not the responsible thing to do”

An operational deficit of $451 million is expected for 2013-14, followed by surpluses of $1.5 billion and $3.3 billion for 2014-15 and 2015-16.

The Tories are also promising to take out another $2 billion from the sustainability fund to cover the deficit.

There are no increases to taxes, while health care spending is expected to jump by 3% to $17.1 billion.

No extra cash, however, will be available for public-sector pay hikes as asked for by teachers, nurses, and doctors.

There’s also $500 million available towards 50 new schools and 70 school modernizations, as promised earlier by Premier Alison Redford.

But within three years, borrowing for P3s and bonds will put the province $17 billion in the hole before the next election — while a saving scheme tied to the price of bitumen would sock money away at a far more modest clip.

The “old way” of balancing the budget — red ink or black — has been replaced with a “new” way of looking at it, divvied into operational, savings and capital plans, said Horner.

That’s worse than creative accounting, said Wildrose Leader Danielle Smith. “It is deceitful… They’re trying to shuffle things around in the three budgets to hide the true nature of the shortfall … It will take a generation to pay off the Redford debt,” she said.

In the 2013-14 budget, the Tories are again banking on rosier bitumen prices in years to come to help touch up the shrinking Sustainability Fund — renamed the Contingency Fund, projecting the bubble to shrink and leave the province with a surplus in the next three years — not an optimistic projection, Horner said.

But he promised there will be operating surplus and $44 billion net financial assets within three years.

The province is calling Albertans privileged among Canadians for their “net assets per capita” — including in that all the province’s savings accounts like the Heritage Trust Fund and the Contingency Account. And Horner throws into the “net per capita assets” column infrastructure like roads, bridges, schools, hospitals because they can be sold, he said.


2013-14 budget

Operating expense: $36.4 billion, same as 2012-13 forecast

-$15 billion over three years for infrastructure projects

-Operating deficit $451 million

—2011-2012 deficit $4 billion

—2012-2013 deficit minus infrastructure debt $1.97 billion

-Personal Income Tax Revenue: $10 billion, up from $9.6 billion last year

-Corporate income tax revenue: $4.8 billion, slightly down

-Tax Revenue: $19 billion, up from $18.6 billion

-Contingency Account (former Sustainability Fund) goal: $5.6 billion or 15% of operational revenue

-“Net financial assets” projected in 3 years: $44B

-More than $24 billion set aside in savings over next three years

-Bitumen revenue forecast based on WTI (Western Texas Intermediate) oil forecast of $92.50, WCS (Western Canadian Select) forecast of $68.21

-Economic growth forecast of 2.9% in 2013

Spending includes:

-$60 million for three years for Family Care Clinics

-$500 million for 50 new schools and 70 modernized school projects


-Seniors will have to have lived in Canada 10 years before getting provincial benefits

-Zero raises for public sector for three years includes teachers, doctors

-New: 44-cent “fee” for mobile phone users that will go toward 911 call centres

-Cut: $300 million for twinning, improvements on Hwy. 881 to Fort McMurray