The 2009 Budget unveiled on Tuesday has a dubious claim: it marks the biggest deficit in Alberta history.

After 15 years of delivering balanced budgets, the Province announced it expects to be $4.7 billion in the red by the end of the fiscal year, followed by projected deficits of $2.4 and $1.8 billion for 2010 and 2011.

The province will also once again begin borrowing money. Finance Minister Iris Evans believes going into debt is worth it if it will keep Albertans working.

"If you reduce infrastructure spending, you lose the jobs. And this is about jobs," said Evans about how budget initiatives will keep 80,000 Albertans employed.

In order to achieve these goals, the Province will rely heavily on the Sustainability Fund, which is now up to $16.8 billion after officials pooled all savings with the exception of the Heritage Fund. The province will also borrow $1.1 billion in each of the next three years.

And while entering a deficit was banned under the Klein government, the new measure is allowed after changes were made to the Fiscal Responsibility Act, permitting the province to borrow for capital spending, but not for operating expenses.

Tobacco tax increases and liquor markup

In order to make up some of the money, tobacco and liquor are being marked up. Effective midnight Wednesday, Albertans will pay an extra $3 for a carton of cigarettes.

They will also pay an extra $1.30 for a case of beer, $0.75 for a bottle of wine, and $2.80 for a bottle of spirits.

Property Taxes

Property taxes will also be raised by 8.6 per cent this year.

Health care

In the health care sector, the government announced as of this summer, Albertans will no longer receive coverage for chiropractic visits - a cut expected to save an estimated $53 million a year.

Albertans were eligible for $200 dollars a year in chiropractic care. Funding for sex-change surgery has also been slashed, saving an estimated $700,000 a year.

Capital health projects are being reigned in, with $386 million less to spend on hospital upgrades and construction projects. Alberta Health Services is expected to dip into $1.5 billion in capital cash reserves projects to finish projects that have already been announced.

Still, several projects listed in the three-year plan are being deferred, including the pediatric emergency room at the Stollery Children's Hospital, and upgrades to the Active Treatment Centre and Women's Centre at the Royal Alexandra Hospital. The projects are no longer in the three-year capital plan, and there is no timeframe on when construction will resume.

Alberta seniors and Albertans in need

Seniors monthly benefits are up $40 for singles and $60 for couples, and $50 million will be spent in 2009-10 to add 450 affordable supportive living and assisted living units.

Wild Rose Foundation

The Wild Rose Foundation, an organization that distributes lottery funds to charities, is being eliminated. All grants will now be handed out through the Community Initiatives Program, but overall funding will be down by $8.2 million this year.

Eco-green Energy Rebate

The province is also setting aside $40 million over the next two years to fund an eco-green energy rebate program, and details are set to be released next week on the specifics of the program.

More cuts on the way?

While the cuts seem minor, officials admit more slashes could be on the way: the Province must trim an extra $215 million by the end of this year.

And if the economic climate does not improve, it will have to make another two-billion dollars worth of what it calls "fiscal adjustments" next year. That money will not be borrowed, meaning the government must either increase revenue or cut spending to make up the difference.

"You're watching two people that are hoping like heck that there's a resolution other than raising taxes and cutting staff - it's that simple," said Evans, who presented the document with Lloyd Snelgrove, president of the Treasury Board.

In all, the Province plans to spend $36.4 billion over the course of the year.


And while $7.2 billion of that sum has been earmarked for infrastructure, officials announced all projects have already been previously announced and there is nothing new slated for this year.

The 2009 Budget marks the largest recorded drop in resource revenues for Alberta, falling 52 per cent from 2008 to 2009.