Alberta to reduce spending by 3 per cent, but no cuts to health, education

Alberta to reduce spending by 3 per cent, but no cuts to health, education

EDMONTON — Alberta Premier Jason Kenney says his government will cut program spending by close to three per cent in Thursday’s provincial budget.

But Kenney, in a TV address Wednesday night, reiterated that health and education funding will not be reduced and maintaining front-line services is a priority.

“Let’s be clear: this will not be an easy budget,” said Kenney, adding the exact reduction figure is 2.8 per cent.

“But these tough decisions are necessary. In fact, they are long overdue.”

The budget is the first one by Kenney’s United Conservative government since it defeated the NDP in the spring election.

Kenney has promised the budget will be a landmark spending document that will balance the books in four years and reorient Alberta’s economy long after that.

He has pledged to get it done by getting more value for public money while reducing overall spending and ending a recent run of multibillion-dollar deficits he says threaten to cripple future generations with unsustainable debt.

“If we don’t act decisively now, we will face far worse in the future,” Kenney said.

The premier did not get into specifics, but said the impact on public service jobs will be “modest” with the overall size of government being reduced through attrition.

He said some capital projects will be delayed or scaled back and that inefficient programs will see reduced funds or be reprofiled or scrapped. There will be increased funding for mental health, addictions and some social programs aiding the most vulnerable, he added.

The former NDP government ran four years of multibillion-dollar deficits as it worked to match services with population growth while embarking on an ambitious program of repairing and building infrastructure — all as sluggish oil and gas prices squeezed the bottom line.

Alberta ran a $6.7-billion deficit in the last fiscal year that ended in March on $48.4 billion in operational spending.

The debt is currently approaching $60 billion and is on track to hit $96 billion by 2023.

After winning the April election, the UCP commissioned a panel chaired by former Saskatchewan NDP finance minister Janice MacKinnon to review Alberta’s finances.

MacKinnon’s panel reported back in August that the province is spending more per capita for public services than comparable regions and getting poorer outcomes.

The operational budgets of health and education alone represent close to 60 per cent of total program spending.

Kenney has promised to rein in spending while growing the economy by delivering incentives to the private sector to create jobs. His government has already passed legislation to cut the corporate tax to eight per cent from 12 per cent over four years.

The NDP, now in Opposition, calls it a regressive plan that rewards corporate friends, has not created jobs and is likely to reduce services and supports for those who can least afford it, including students and people relying on disability payments.

The New Democrats also expect costs of Thursday’s budget will be downloaded. A recent proposal from the province has suggested that rural municipalities pick up some or most policing costs, and the MacKinnon report has urged the government to remove a cap on tuition.

“I’ve heard from other organizations that receive grants that are bracing for 25 per cent reductions over three years,” said NDP finance critic Shannon Phillips.

“That doesn’t sound very careful or thoughtful to me. It sounds like an across-the-board program that will ensure that ordinary people get less while large corporations get a $4.5-billion tax cut.”

The government disputes that figure. It also says the number is misleading because it is a straight-line projection over four years and doesn’t factor in job growth or new revenues.

Earlier Wednesday, Finance Minister Travis Toews pulled on a pair of size 10 cowboy boots as part of a tradition among finance ministers to showcase footwear before the budget.

“This will be a thoughtful, surgical budget,” he said, adding his boots, like the budget, reflect the heritage, resilience and self-reliance of Albertans.

This report by The Canadian Press was first published Oct. 23, 2019.

Dean Bennett, The Canadian Press

Alberta budget

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