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PostPosted: Thu Apr 14, 2016 5:40 pm    Post subject: Alberta ndp post a $10 billion dollar deficit in new budget Reply with quote

( the death of the alberta dream continues with the ndp in power , this amount of debt for a province the size of alberta is insane and unaffordable long term )

Alberta budget forecasts $10.4 billion deficit, outlines carbon tax

The Canadian Press
Published Thursday, April 14, 2016 4:19AM EDT
Last Updated Thursday, April 14, 2016 5:52PM EDT

EDMONTON -- The Alberta government, with oil prices taking massive bites out of its bottom line, blew past its own spending safeguards Thursday to deliver a budget that forecasts almost $58 billion in debt within three years.

Finance Minister Joe Ceci confirmed that this year's deficit will be $10.4 billion and said there is no expectation of balancing the books before 2024.

He also outlined details of a planned carbon tax that will cost a household earning more than $100,000 annually about $500 a year by 2018.

Alberta Finance Minister Joe Ceci
Alberta Finance Minister Joe Ceci tables the government's 2016 budget at the legislature in Edmonton, Thursday, April 14, 2016.

Alberta budget tabled in Edmonton
Alberta Premier Rachel Notley, bottom centre, looks on as Finance Minister Joe Ceci, left, passes out the government's 2016 budget at the legislature in Edmonton, Thursday, April 14, 2016.

Alberta Finance Minister Joe Ceci applauded
Alberta Finance Minister Joe Ceci is applauded as he tables the government's 2016 budget at the legislature in Edmonton, Thursday, April 14, 2016.

There are no other new or increased taxes.

Ceci told reporters before he tabled the budget that making deep cuts to a tanking oil-powered economy would only make things worse.

"We are continuing to put the pedal to the metal so that we can support Albertans through this downturn, the worst downturn in a generation," he said. "We're going to come out the other side in 2017."

Next year's budget deficit is forecast to be $10.1 billion and another shortfall of $8.4 billion is expected the year after that.

The last $3.8-billion of rainy-day savings in the Contingency Fund will be gone this year and Alberta will borrow $5.4 billion just for day-to-day operations.

The $58-million debt by 2019 is a significant leap. In the NDP's budget last fall, the plan was for a $48-billion debt, but not until 2020.

To legally rack up the number, Premier Rachel Notley's government plans to rewrite a law it passed late last year that capped borrowing to a maximum 15 per cent of the province's GDP. The cap is to be eliminated.

Ceci had previously said the cap would keep interest payments on debt repayment within reasonable limits and not hamstring future generations.

The carbon tax begins Jan. 1 and will increase the cost of gasoline by almost 4.5 cents a litre. It will also raise the cost of home heating, but not electricity. The carbon tax is to increase in 2018.

The levy is expected to cost a household earning more than $100,000 annually $338 in 2017 and $508 in 2018.

A household under $51,250, or $103,000 per couple, will get rebates -- plus a little bit more -- of $360 next year and $540 the next.

The carbon tax is part of the government's larger climate-change strategy to reduce Alberta's carbon footprint and give it what it terms "social licence" to argue for increased energy infrastructure such as pipelines.

The tax will raise an estimated $274 million in the abbreviated 2016-17 fiscal year and then rise to $1.7 billion by 2018-19.

Notley has promised to reduce Alberta's dependence on oil and gas revenues and the budget builds on that commitment.

There are two new tax credits worth $250 million to encourage investment in small- and medium-sized businesses and give business leaders incentives to make capital investments.

The small-business tax is to be cut to two per cent from three.

The overall spending increase is two per cent with small hikes in the core departments of health, education, advanced education and social services.

The province is also avoiding cuts to front-line services.

"Alberta families will know we have their backs," said Ceci.

The budget is based on West Texas Intermediate, the benchmark price for oil, averaging US $42 a barrel this year and then US$54 the year after.

The price has fallen from a high of more than US$100 a barrel in mid 2014 to under $30 in January and back again to the low $40s.

This year, Alberta expects to take in $1.4 billion in non-renewable resource revenue compared with almost $10 billion two years ago.


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PostPosted: Thu Apr 14, 2016 5:48 pm    Post subject: Reply with quote

Alberta budget 2016: A look at some of the winners and losers

Oil pumps in Alberta
Pumpjacks pump crude oil near Halkirk, Alta., June 20, 2007. (Larry MacDougal/THE CANADIAN PRESS)

The Canadian Press
Published Thursday, April 14, 2016 5:44PM EDT

EDMONTON -- The Alberta government tabled its 2016-17 budget Thursday. Here are some of the winners and losers:

Winners: Small businesses. The small-business tax to be cut to two per cent from three per cent on Jan. 1.

Winners: Low-income families. The new Alberta Child Benefit to provide up to $2,750 each year to vulnerable families, including 235,000 children. There are also enhancements to the Alberta Family Employment Tax Credit.

Related Stories

Alberta budget forecasts $10.4 billion deficit, outlines carbon tax

Alberta budget 2016: A look at the highlights

Losers: Higher-income earners. The new carbon tax will cost households making more than $100,000 a year an estimated $338 annually. That will jump to $504 next year. Anyone making more than $51,250 in net pay will not receive a rebate.

Losers: Future generations of taxpayers. Alberta debt is expected to reach $58 billion by 2019.

Losers: Parents of school children. Promised reductions in school fees have been delayed for a second time.

Winners: Municipalities. The province will continue with the second year of a $35-billion accelerated capital infrastructure plan, including money for ring roads in Edmonton and Calgary and a key traffic interchange in Red Deer.

Winners: Public-sector workers. No cuts planned in front-line services.

Winners: New workers. There is $15 million to help apprentices complete training and work experience requirements and $10 million to train those under-represented in the workforce, including women and indigenous people.

Winners: Tourism. Funding for expansion of the Calgary Zoo and Fort Edmonton Park.


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PostPosted: Thu Apr 14, 2016 5:50 pm    Post subject: Reply with quote

Alberta Budget 2016: Books won't balance until 2024 due to lowest oil revenues in over four decades

Mariam Ibrahim
More from Mariam Ibrahim

Published on: April 14, 2016 | Last Updated: April 14, 2016 4:32 PM MDT

Graham Thomson: 'Alberta Jobs Plan' is a misnomer for new budget

Alberta’s NDP government won’t balance its books until at least 2024 as the province prepares to smash through its debt ceiling by taking on ballooning debt to pay for day-to-day operations amid a sluggish economy.

With resource royalty revenues expected to dip to a meagre $1.4 billion — the lowest since 1974 — the 2016 budget is projecting a $10.4 billion deficit. That’s expected to drop slightly to $10.1 billion next year and $8.4 billion the year after, but the budget fails to include a plan to return the provincial books to balance.

“Based on those assumptions in this budget, I‘m aiming to balance the budget by 2024,” Finance Minister Joe Ceci told reporters Thursday.

“To balance sooner would require that we undertake brutal cuts to health and education and pretty much every service provided by government. If the economy improves more quickly — and we all hope it does — then the budget will come into balance sooner.”

To help avoid drastic cuts, the NDP will toss out legislation passed last fall that limits the province’s debt to 15 per cent of nominal gross domestic product, setting the stage for the province’s debt to swell even more quickly than projected in last October’s budget.

The plan sets aside $250 million over two years to help create 100,000 jobs over three years through tax credits and investment funding.

It also unveils plans for the province’s promised carbon tax, including the investment of $6.2 billion over five years in renewable energy, green infrastructure like public transit, and the establishment of the Energy Efficiency Alberta agency.

A further $3.4 billion will provide rebates to low and middle income Albertans to help offset the tax’s household impact. Included in that is the allowance for a one-per-cent cut in the small business tax, from three per cent to two per cent.

Legislation tabled by Ceci Thursday will clear a path for the debt to GDP ratio to rise to 15.5 per cent by 2018-19, when capital and operational debt is projected to hit a combined $57.6 billion — $10 billion more than projected last October.

“We’re in a different situation than we were six months ago,” Ceci said. “We know we need to continue to invest in this province.”

During last fall’s budget, Ceci touted the debt limit as an economic safeguard to protect the province’s credit rating and was implemented in early December.
He said he will not implement a new cap because the province’s economic reality requires more borrowing flexibility as the New Democrat government maintains health, education and human services spending.

“Instead we’ll carefully manage spending, ensuring we are spending every tax dollar wisely, while helping Albertans as they weather this downturn,” he said. “Even as oil prices plummet, Albertans will send their children to quality schools and they will have access to timely medical care when they need it.”

Oil is forecast to hit an average of $42 US per barrel this year, $54 the next year and $64 in 2018-19. But for the first time the budget also includes a risk adjustment that imagines a scenario in which oil prices are $10 less per year than forecast.

The province is also following through on a plan to borrow for operational spending — the first time the province has done so since 1993-94 — as it depletes its $6.5 billion Contingency Account, a rainy-day fund used to backstop significant drops in government revenue.

Operational debt — money borrowed to pay for programs and services delivered by the government — will hit $5.4 billion in 2016-17, before climbing to $13.8 billion in 2018 and $20.6 billion in 2019.

And for the first time the province’s expenses will surpass $50 billion. This year they will exceed $51 billion and are expected to increase to $53.6 billion in 2017-18 and $56 billion the year after.

Revenues are expected to hit $41.4 billion this year but won’t rebound until 2018-19, when they are expected to reach $49.6 billion.

Finance Minister Joe Ceci says budget will help Albertans weather...


Dubbed the Alberta Jobs Plan, the 2016 budget sets aside $250 million over two years to help spur job growth. The province’s unemployment rate is expected to peak at eight per cent this year before beginning to drop at the end of 2016, but Ceci said the government believes the plan will help create 100,000 new jobs across the province over the next three years.

Included in the $250 million is $190 million for two new tax credits aimed at businesses and investors, along with $25 million for the Alberta Enterprise Corporation to spark innovation. A further $60 million is earmarked to attract new business and to create new apprenticeship and training opportunities.
The plan replaces a now-cancelled $178-million job creation incentive grant program unveiled in the last budget that immediately became a target for critics.


Spending on health care is set to top $20 billion for the first time this year, as the government attempts to avoid major disruptions in services while simultaneously trying to slow the growth in costs.

The budget calls for overall expenditures to rise about three per cent, or just over $500 million, from projected spending in 2015-16, with plans to eventually get to annual 2.5-per-cent increases. In the last several years of the PC government, health care spending jumped an average of six per cent a year.

Alberta Health Services will receive the bulk of the funding, $14.3 billion, up about $175 million from projected spending this year.

However, the money is coming in more restrictive envelopes, with specific amounts set aside for home care, continuing care, ambulances and other areas. It is expected a portion of the AHS increase will go toward boosting funding for midwives, though it is unclear how much.

Funding to pay doctors is also going up $63 million — to a total $4.4 billion — which represents a smaller increase than usual as the government and Alberta Medical Association negotiate on how to rein in the rise in costs.

As for health infrastructure projects, the province has set aside nearly $3.5 billion over the next five years, though more than a third of it will be eaten up by construction of the new Calgary Cancer Centre. No new funding was announced for major projects in Edmonton, leaving the aging Misericordia and Royal Alex hospitals in limbo, along with the proposal for a new medical lab facility.

A total of $365 million was set aside for new continuing care spaces, though it’s unclear how many beds will be added to the system. As well, $400 million will go toward creating a new clinical information system, while the capital plan also includes $500 million not yet allocated.


Despite lengthy wish lists submitted by school boards, no new major school construction projects are funded in this year’s budget. The government will spend around $1.6 billion this year on 200 school construction and modernization projects that are already underway.

The government pledged to keep up with growing school enrolment by providing school boards the money for an estimated 8,200 new students expected to be in Alberta schools by this fall.

Early childhood and K-12 education spending is $7.9 billion this year, up 4.3 per cent from last fall’s education budget.

An NDP promise to fund a provincewide school lunch program is being phased in, starting with a small-scale pilot project at select schools this year, with a promise of $30 million to expand it in the following two years.

The government delayed an election promise to reduce basic school fees as the ministry conducts a “detailed review” of how each school board sets those fees.

For Alberta post-secondary students, a tuition freeze — expected to cost $16 million — will continue for a second year, as promised.

Universities, colleges and technical institutes will again see a two per cent increase in their operating grants.

The Ministry of Advanced Education’s budget grew 1.2 per cent to nearly $5.9 billion.


The big budget news for municipalities is a huge boost in spending on affordable housing. Finance Minister Joe Ceci said the investment is being more than doubled to $892 million by 2021.

Mayor Don Iveson has been lobbying for years to have the province to put more money into this area to help thousands of homeless or poorly housed Edmonton residents.

The increase is part of what the Seniors and Housing department says is a jump in five-year overall housing spending to roughly $1.2 billion from the previous estimate of about $300 million.

But it’s not all positive in the short term. Municipal infrastructure grants have been cut from October’s fiscal document by $50 million this year and next, to $846 million annually, although the five-year total is up almost 10 per cent.

And the three-year fund for municipal transit has been cut by $25 million from last October, to $305 million. Exactly what that money will pay for is now being discussed in a series of public consultations.

Five-year Green Trip funding for public transit construction is down about $30 million from the last budget, to $914 million.

Agencies, Boards and Commissions

Late last year, the government undertook a review of all 136 agencies, boards and commissions (ABC), looking for savings in a sector that accounts for almost half of the province’s spending. The result was a series of penny-pinching moves pegged to save $33 million over three years, in which 26 agencies will be merged or disappear altogether.

Four agencies involved in research — Alberta Innovates, Health Solutions, Energy and Environment Solutions, and Technology Futures — will be rolled into a single provincial corporation focused on applied research.

Four boards with land right and property ownership mandates will share administrative tasks like finance, IT and recruitment. The change will involve the land compensation, surface rights, municipal government and new homebuyer protection boards.

And the mental health review panels that deal with admissions, discharge, competence and treatment administration under the Mental Health Act will become one administrative review panel.

Other agencies, some that have not met in years, or their mandates are complete (or close to it), will be dissolved. Others will see their functions come under the umbrella of ministries.

The government determined, for instance, that there was “very little demand” for the agricultural development committee, and Albertans can instead seek recourse through the Agriculture Financial Services Corporation. Similarly, the disabled hunter review committee will be disbanded.

Other agencies being cut include the Wild Rose and Government House foundations, Alberta Next Generation and seniors advisory councils, the Buffalo Lake management team, the Alberta farm safety advisory council, and the Alberta monitoring, evaluation and reporting agency.

Sunshine List

Despite earlier promises from the government, an infrastructure sunshine list that was supposed to be unveiled last October failed to meet expectations.

Instead, the government provided a three-page list of unfunded capital projects in alphabetical order, giving Albertans no indication as to which projects take priority if funding becomes available.

The Edmonton projects on the list include upgrades to Anthony Henday Drive, phase one of the Cross Cancer Institute, and work on the University of Alberta’s dentistry and pharmacy building.

Infrastructure and Transportation Minister Brian Mason said last summer he hoped to publish the infrastructure list in the fall to let Albertans know where the construction of capital projects in their communities ranked. The list was meant to discourage politicians from building projects purposefully in ridings where they could score votes.

On Thursday, Finance Minister Joe Ceci acknowledged that “they’re not listed one to 100, but they’re indicative of the kinds of things that will make its way onto our capital funding list once we move other things off.”

“The commitment has been kept and all Albertans will be able to see the kinds of projects that meet funding from the provincial government in the future,” he said.


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PostPosted: Fri Apr 15, 2016 9:22 am    Post subject: Reply with quote

Braid: After that budget, could the NDP please calm down?

The New Democrats call their new budget the “Alberta Jobs Plan.”

They are being far too modest.

It is really the Alberta Tax, Deficit, Debt, Subsidy, Climate Change and, as a bonus, Jobs Plan.

The budget is gasp-inducing in its effort to remake Alberta, a self-acknowledged rush job by the NDP to force Alberta into the modern era after 43 years of Tory inaction, according to Finance Minister Joe Ceci.

The budget truly is the death warrant of that old Alberta. Anybody who imagines otherwise has to read the thing. It’s like a snapshot of a derelict casino with a government still throwing down bets.

There must be moments, in the still of the night, when Ceci wishes he had the luck of former premier Ralph Klein, and could impose his changes with oil prices high.

But they are catastrophically low. All oil and natural gas revenues are now a minor $1.3-billion line item in the budget. As a consequence, the deficit will be $10.4 billion. And another $10.1 billion in 2017-18. By 2018-19, the province will be $57.6 billion in debt.

Alberta budget 2016 deficit wide, after attracting so many billions of investment dollars over more than a decade, will return only $656 million to the treasury in 2016-17.

Overall government revenue is expected to rise over the next three years, but that’s mostly because of taxes, especially the new carbon levy, rather than any great leap in royalties.

For consumers, the most obvious hit will be an extra 4.49 cents per litre at the gas pumps, rising to 6.7 cents the following year.

Federal transfer payments ($7.2 billion) are now a bigger revenue source than bitumen. Personal income tax, at $11.4 billion, is Alberta’s biggest single cash producer.

The NDP has decided, quite consciously, to force change at the most difficult time possible, while arguing that these very difficulties make it essential.

Once they threw open the government toolbox, uncorking all its gizmos and levers, they adjusted nearly everything.

Spending for economic stimulus and operations is so high, and revenue so low, that the government had to remove the 15 per cent cap on borrowing, as a percentage of GDP, that they legislated only last fall.

It’s no surprise that the contingency account, the rainy-day hip pocket established by Klein and developed by successor Ed Stelmach, is now officially empty.

But the result is still startling. With no savings to cover operations, the NDP will borrow $5.3 billion in the new fiscal year to cover the day-to-day business of government.

That borrowing will reach $8.4 billion the following year and $6.8 billion the year after that.

In principle, such borrowing isn’t a wild risk to take when there’s confidence the economy will rebound. But the very scale of the NDP ambitions, and the determination to front-load solutions, poses real dangers of much higher taxation in future.

It’s already upon us, in fact. The gas price hike, added to last year’s decision to leave a PC increase in place, will raise tax on a litre by 8.5 cents in one year.

The climate levy on home utility bills will add $136 to the annual cost for a couple with two children. The extra cost for gasoline, the NDP estimates, will be $202 per year.

For 60 per cent of Alberta families classified as low- or middle-income, most of this will be rebated. The first cheques, by curious coincidence, will arrive next January, just as the carbon tax takes effect.

Ceci says he can’t even talk about debt repayment yet, by which he seems to mean he isn’t thinking about it either. The NDP has now pushed the informal target for annual budget balance ahead six years, from 2018 to 2024.

Of all the dramatic numbers in this budget, the most jolting comes in the province’s statement of net assets.

The PCs always claimed that Alberta ran a net surplus, beyond government business, because the value of all its holdings exceeded obligations.

No longer. This measure of provincial wealth will plummet from a $4-billion surplus to a $10-billion deficit.

It’s still my view that the New Democrats have a good basic plan for Alberta’s future. This budget certainly shows the need to diversify, and it includes several measures that will, hopefully, encourage both job creation and new industries.

But one rule of successful government in Canada is that you can’t do too many things at once. So, maybe they could calm down a bit?

Don Braid’s column appears regularly in the Herald
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Alberta ndp post a $10 billion dollar deficit in new budget

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