Alberta's budget: Here's what you need to know
Highlights from the Alberta NDP's latest budget, which projects deficits for the next six years and a provincial debt that will double within three
The Alberta government has tabled a third consecutive deficit budget that projects the provincial debt will double in the space of three years. Over the long term, the NDP government is betting on rising oil prices – and a pair of controversial pipelines that could be delayed or derailed – to bring the province's finances back into balance.
Here's what you need to know about the budget.
Deficits and debt
In a province that once boasted it had wiped out its debt, the latest Alberta budget includes large deficits that are projected to shrink in the coming years, returning to balance by the 2023-24 fiscal year.
In 2004, then-premier Ralph Klein declared Alberta debt-free after paying off $23-billion he inherited a decade earlier. At the time, Mr. Klein promised: "Those days are over and they're over for good."
Those days are very much back. The provincial debt is projected to be $32.63-billion by the end of the current fiscal year, ballooning to $71.12-billion by 2020.
Betting on oil
Despite insisting it was focused on weaning the province off its dependence on oil and gas royalties, the NDP government's latest budget relies in part on petroleum to help dig the province out of deficit. The budget predicts rising prices combined with a pair of pipeline projects – Kinder Morgan's Trans Mountain expansion to B.C. and Enbridge Inc.'s Line 3 replacement to Wisconsin – will triple income from royalties by 2020.
That assumes oil prices will continue rebounding, hitting $68 (U.S.) a barrel by 2020.
After two years of negative growth, Alberta's GDP is projected to lead the country in growth in 2017 and keep increasing. Again, much of that growth hinges on the two pipelines and the increased production they would bring. The budget document says increased oil production would lift real GDP by 1.5 per cent and create 12,000 jobs.
Unemployment reached a high last fall of 9 per cent and has been coming down slowly in the past few months. The budget projects that trend will continue, returning to numbers more in line with the current national average – but still worse than just a few years ago – by 2020.
New promises and spending
The budget avoids significant spending cuts while also including new spending for several projects. They include:
- A new hospital in Edmonton at a cost of $400-million.
- A new continuing-care centre in Calgary at a cost of $131-million.
- A new court house in Red Deer at a cost of $97-million.
- There is $14.5-million in the budget to hire more Crown prosecutors and support staff.
- Education funding hits $8.2-billion with money for 10 new schools and 16 more replacements and modernizations.
- There is $566-million over the next three years for a variety of programs, such as low-energy light bulbs, to help lower energy bills.
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