The provincial government released what they called a balanced budget Thursday, a rosier fiscal outlook compared to the tight budget of 2013.
Budget 2014 was dubbed “turning a corner” by the province, after an extremely tight budget last year. An increase in energy, tax revenue and a lower loonie were credited for the boost.
Money was set aside for homelessness initiatives, highways, education grants and more.
A total of $40.4 billion was spent on operational expenses with an operational surplus of $2.6 billion. The consolidated surplus is $1.1 billion after capital costs and loan payments are factored in.
The province will spend $6.6 billion on capital projects mostly to pay for items already announced. The Alberta government will borrow $4.9 billion, bringing the province’s total debt to $14.5 billion.
With more than 105,000 people moving to the province in 2013, the amount of taxes being collected is up. Revenue is expected to be to be $44.4 billion in 2014-2015 - while the previous budget estimated revenue to be $38.7 billion.
Despite hosting a summit to review energy revenue, the province has not changed how they estimate prices. 21 percent of the province’s revenue came from energy.
The forecasted price of West Texas Intermediate (WTI) was estimated at $92.50 per barrel but prices have gone up, so the price is $95.22 in the 2014 budget. The estimated price of Alberta bitumen, or Western Canada Select (WCS) is $77.18, up from the 2013 forecast of $68.21 per barrel.
The budget does not rely on an approval for the proposed Keystone XL pipeline.
There will not be any new taxes or tax rate increases for Albertans in 2014.
Paying for schools
Education received $6.5 billion in operational funding to pay for the 3 percent enrolment growth anticipated in the upcoming school year.
The budget set aside $345 million towards for the 50 new schools and 70 school modernizations previously announced by the government.
There was also money allocated to pay for 35 other school projects already announced. More details on the schools were expected to be released online Thursday afternoon.
Post-secondary institutions were given about $2.1 billion in grants but it comes after harsh cuts to the system in the 2013 budget.
In 2013, $150 million was cut from post-secondary grants. $50 million was later restored. This year’s budget included a $32.5 million operational increase over the previous year. The 2014-15 grants will also include the Access to the Future Fund worth $50 million.
More than 63,000 students will be given student loans costing the government $408 million.
There was no line in the budget for a teachers' tax credit for school supplies or for full day kindergarten although there was money allocated to research full day kindergarten.
Support for municipalities
Over the next three years, $19 billion was set aside to be dispersed through the Building Alberta Plan.
While there was no specific money set aside for the Edmonton LRT expansion, there are three areas of funding available for the city to apply for.
The Municipality Sustainability Initiative, or MSI, will see a province-wide increase of $25 million in 2014-15, $50 million in 2015-2016 and $75 million the following year. Edmonton received $170 million of MSI funding in 2013.
Edmonton can also apply for GreenTRIP funding which will provide $667 million to municipalities over the next three years.
The Municipal Transportation Grant is another option for the city.
After spending $3.8 billion on flood recovery initiatives in 2013, the province set aside an additional $1.1 billion in operational expenses and capital spending over the next three years.
Spending for health care
There was $18.3 billion budgeted for health care including $1.5 billion allocated for prescription drugs, cancer therapy drugs and specialized high-cost pharmaceuticals.
Alberta Health Services only received a 2 per cent increase in their funding despite a previous promise of a 4.5 per cent increase this fiscal year.
They have $10.7 billion to spend after cutting the majority of positions from their board in the past year.
There will be a large increase in funding for enhanced home care and rehabilitation. Part of the $40 million allocated will provide 1,000 Albertans access to homecare support.
The Strathcona Community Hospital in Sherwood Park will receive $31 million in capital money and $22 million in operational money. The hospital will include a 24 hour emergency room, diagnostic and therapeutic services, mental health services and more.
South Health Campus in Calgary received $341 million in operational funding and $30 million was budgeted for the Kaye Edmonton Clinic.
To save more than $120 million the province will continue to encourage the generic brand for prescription drugs, consolidate 18 drug and health benefit programs and streamline administration.
No money for government workers
There was no provision for wage increases for 22,000 government workers who were still without a contract at the time of the budget.
The government had offered the workers under the Alberta Union of Provincial Employees a contract including a lump-sum payment of $3,100 in April 2014 and a $775 lump-sum cash payment next year. It also offered a two percent salary increase in 2016-17.
The union rejected that offer saying it did not meet all their requests.
Two bills were put forth in the legislature to impose a four-year contract and impose penalties on individuals who take part in wildcat strikes if a deal was not reached.
Those bills were suspended after an injunction by the Alberta Court of Queen’s Bench.
On Thursday government officials said no wage increase was budgeted for because an agreement had not been reached.
If a deal including a wage increase is done, departments would need to pay for that in the amount they received in the budget.
Funding for vulnerable Albertans
The Ministry of Human Services has an operating budget of $4.1 billion, an increase of $213 million over the previous fiscal year.
Assured Income for the Severely Handicapped (AISH) will provide 50,000 Albertans with income, health benefits and other supports.
After criticism over the care of children in foster care from those in the system and opposition parties, $199 million was set aside for foster care support. It will pay for 5,000 foster child placements.
There was a $19 million increase of funding for homeless support programs with $131 million going towards housing 2,000 homeless Albertans including 100 new housing units.
Funding for more than 3,200 spaces in emergency and transitional shelters was also budgeted for.
Saving for the future
Over the next three years, the province budgeted putting $26 billion into savings accounts.
Beginning in the 2015-16 fiscal year the Fiscal Management Act will start to be phased in. It will see a portion of the province’s non-renewable resource revenue set aside each year.
Two new endowments were created in the budget within the Heritage Savings Trust Fund.
The Social Innovation Endowment and Agricultural and Food Innovation Endowments will provide annual disbursements up to 4.5 percent of their market value.
There will be $1 billion in the Social Innovation Endowment over the next two years to start the project. The money will go towards ideas for projects aimed at eliminating poverty and family violence.
The Agriculture and Food Innovation Endowment will start with $200 million in it. The money from that endowment will go towards agricultural research and product development.
The province estimated putting nearly $700 million in the Alberta Future Fund by the 2016-17 fiscal year. That fund would be available to be allocated to any projects supporting future growth in Alberta including infrastructure and education investments.
The extras
Money was set aside to hire 40 new RCMP officers.
The twinning of Highway 63 to Fort McMurray is on track and part of 258 kilometres of new or twinned highways was included in the budget. 2,500 kilometres of highway will be rehabilitated over the next three years.
While the financial picture has turned a corner, Finance Minister Doug Horner warned the province is not in the position it used to be just yet. He said spending is still well below what it has been in previous years and will continue to be so for some time yet.
