The provincial government released a budget Thursday they said will provide long-term stability but hold the line on spending.
Budget 2015 included deficits for this year and the following year. In 2015, the deficit is projected to be just under $5 billion - the largest deficit in modern history. The deficit in 2016 is expected to be slightly over $3 billion. Finance minister Robin Campbell is predicting a return to surplus budgets in 2017.
The province moved to a consolidated budget in the same format as the fiscal plan.
The dramatic drop in oil prices is being blamed for a revenue shortfall of $7 billion. The price of oil has hovered around $45 US per barrel in recent weeks. The price of West Texas Intermediate (WTI) was forecast at $79.87 per barrel in 2014-15. The 2015-16 budget used a more conservative price of $54.84 per barrel. The 2016-17 forecast uses an estimate of $62.80 per barrel.
To offset the drop in revenue, $4 billion was taken from the Contingency Account bringing it to $2.5 billion by the end of 2015-16. An additional $1.5 billion will be taken in the following year.
New changes to taxes were also introduced to bring in an extra $1.48 billion. A new health care levy was introduced along with increases to the fuel, tobacco and alcohol taxes.
Healthcare saw cuts both to funding and to staffing. The department insists it will maintain front line services and nearly 1700 FTE (full time equivalent) positions will be removed primarily through attrition and through non-front line reductions.
Education received more funding said to be primarily for accommodating negotiated teacher salary increases but class sizes are still expected to increase in the coming year due to 12,000 new students expected in the fall and no new teachers being hired.
New taxes
The province is phasing in a Health Care Contribution Levy based on a person's income. Any Albertan who makes more than $50,000 annually will have to pay the levy beginning July 1, 2015. It is a progressive levy starting at $200 per person per year.
The levy will be paid through the personal income tax system. Employers will not be able to cover the levy as they could with health care premiums eliminated in 2008.
Albertans who make more than $130,000 will pay up to $1,000 each year with the tax. That is the maximum amount anyone will pay in 2016.
Children will not have to pay for the levy.
Finance Minister Robin Campbell said the levy is not a step the province introduces lightly.
A new tax bracket was also introduced in the budget.
Albertans will be taxed an additional 0.5% each year for the next three years on any income over $100,000. Incomes over $250,000 will see slightly higher increases.
"We are asking those who can afford it to pay a little bit more," Finance Minister Robin Campbell stated.
A pre-budget survey of Albertans showed the majority of people were in support of raising corporate taxes. Despite that, the corporate income tax will not change.
The province says corporate profits are down 50% and higher taxes would cost people their jobs.
Increased fees
Beginning at 12:01 a.m. on March 27, Albertans pay extra for fuel, tobacco, traffic infractions, alcohol and more under budget 2015.
For the first time since 1991 the province is raising the fuel tax. It went from 9 cents per litre to 13 cents per litre.
Tobacco taxes are up as well: each carton rises from $40 per carton to $45 per carton.
Liquor mark-ups are higher. On average, the cost of a bottle of wine or liquor climbs 16 cents per bottle. The cost of beer is up by about 90 cents per case of twelve.
The fine for traffic offences climbs by 35% on average. Tickets for speeding went from between $57 and $351 depending on the offence, to $78 to $474 depending on the offence.
Fees such as drivers licences, death certificates, land title searches, campsite fees, and several court filing fees are also increased by varying amounts.
Cuts
Alberta Heath Services had their budget cut by $300 million in the budget. They also lose 1,695 full-time equivalent positions. The finance minister said the goal is no layoffs. Instead, vacant positions won’t be filled.
Education is seeing an increase in funding but it isn’t enough to keep up with enrollment. School boards are forced to make due with a 3% reduction across the system. That is equal to $78 million.
The province expects 12,000 new students in the system this fall. They admit there will likely be an increase in class sizes and support staff positions could be cut.
The extras
A new tax credit is being introduced for working families. The Alberta Working Family Supplement will begin July 1, 2016.
Working families who earn between $2,760 and $41,220 annually will be eligible for the tax credit. Families with one child could receive a maximum annual benefit of $1,100. They will receive an addition $550 for each of the next three children.
The province will continue to build projects already promised. To do so, they plan to borrow $5.7 billion. The highest amount borrowed for capital spending in modern history.
Opposition to budget
Budget 2015 came with plenty of opposition. The Canadian Taxpayers Federation said the budget is nothing but taxes.
“Mr. Prentice is making Alberta families pay the price for the PC party’s waste and mismanagement through the largest tax increase and deficit in Alberta history,” said Wildrose intrim leader Heather Forsyth.
Those in the health community expressed concerns cuts will effect patient care.
“We’re talking about frontline healthcare workers. I don’t see where else they can cut those types of positions,” said Sandra Azocar with Friends of Medicare.
The Alberta Union of Provincial Employees echoed that concern saying the budget hurts public sector workers across the board.
“The population has grown but the number on the front lines hasn’t grown,” said AUPE President Guy Smith.
“I don’t know where on earth they’re gonna cut without hurting services to the people of this province,” he added.
As for the cuts school boards face, the Alberta School Boards’ Association said this budget will make things difficult moving forward.
“We’re looking at inflation. We’re looking at a lot of things that we have to cost out that we’re not going to be able to do,” ASBA President Helen Clease told the media.
Now that the budget has been released the government is expected to call an election. Critics said the budget does not warrant an election. Bob Murray with The Frontier Centre told CTV the budget is a cop-out and that the government could have done more to cut the deficit. He said the government has a clear mandate and that the budget should not send Albertans to the polls.
