Alberta gov't halting spending to address needs due to population growth not 'brightest idea': critics

The Alberta government is facing criticism the day after the premier suggested in a televised address its upcoming budget will follow austerity measures.

Premier Danielle Smith on Wednesday evening said lower-than-expected resource revenues will require her UCP government "to show more restraint" in its financial plan for the upcoming fiscal year. The government is scheduled to deliver its budget on Feb. 29.

Smith shared that information along with statements the province would delay promised income tax cuts, and make moves to bolster and support the Alberta Heritage Fund.

Chetan Dave, an economist at the University of Alberta, says while the idea to reinvest long-term in the Heritage Fund — which was created in 1976 by the Progressive Conservative government of the day to accumulate wealth from oil-and-gas revenues and was later used to balance budgets — is laudable and achievable if it's run independently, the notion the government would hold back on spending to support services such as health care and education in the wake of a population spike isn't "the brightest idea."

"How will we address the fact that Alberta is growing now, with lots of families moving in now, with lots of businesses moving in now?" Dave told CTV News on Thursday.

"To grow the province, you do need health care addressed, you do need education addressed — both Kindergarten-to-Grade-12 and higher education — to keep Alberta's growth going."

Dr. Paul Parks, the president of the Alberta Medical Association, said given the influx of new residents to the province — it grew by 194,000 people, or 4.3 per cent, in 2023 for a total of 4.7 million — and a deficit of family doctors for up to 800,000 people, the thought of the government keeping health-care spending levels the same when the needs of the struggling system are high is a concern.

"Maybe if they have to find the money in the back end somewhere else, that's something we'd be willing to work with them on the health-care side, but we can't wait for years down the road for the Heritage Fund to grow and for our debt to go down before they invest in family medicine, or there won't be any access to family medicine in our province," Parks, whose organization represents the province's physicians, told CTV News Edmonton.

What Parks said he hopes to hear next week when the government presents its budget is "a firm commitment that they'll make that investment up front on family medicine."

"It's fine to see if we can find savings within the health-care system budget itself, as an example, but there are definitely areas where we know that there needs to be an upfront investment," he said.

"Specifically, in primary care and access to family medicine specialists, we know that we do not have an Alberta advantage compared to other provinces next to us. In B.C. and Saskatchewan, they make huge investments into primary care -- up-front, significant budgetary investments.

"We need that in Alberta, as well."

Political scientist Trevor Harrison, a professor emeritus of the University of Lethbridge, said while the idea that Smith's government would approach spending promises cautiously and fan the fire for fortifying the Heritage Fund is expected from a conservative regime, and that there is genuine pressure from health care, education and municipalities — with their needs surrounding housing and drug addiction — for increased funding, people are flocking to Alberta for a reason: more opportunity than from where they came.

"I think they're trying to say, 'We understand, we sympathize, but there is no money to spend on this," Harrison told CTV News on Thursday.

"I think it's somewhat giving themselves political protection. I don't know how well that's going to work because I think most Albertans are going to say, 'Hey, we still seem to be pretty well off here.' That's why so many people are moving to the province is because it is perceived as being certainly better off than most other provinces."

Still, the pressures will remain, Harrison said, given previous government cuts that left Alberta in the under-serviced state it's in now.

"Smith has said we will keep the increases to population and inflation growth, but you have to start thinking about where it starts from," Harrison said.

"There were pretty severe cuts before, so what they're really saying is, 'Well, there's no money to catch up what was cut before,' so even if you keep it at population inflation, there are some real pressures there, particularly health and education, which are really big political items.

"I think that's still going to be a bit of a problem for them, but I think the discussion around the Heritage Fund and a certain amount of penury is a way of trying to shelter themselves from that pressure."

With files from CTV News Edmonton's Chelan Skulski and CTV News Calgary's Timm Bruch