Alberta Premier Jason Kenney speaks during a news conference in Edmonton on Feb. 24, 2020. It’s budget day in the province, and Kenney’s United Conservative government is promising more help in the fight against COVID, but more red ink on the bottom line. THE CANADIAN PRESS/Jason Franson

Alberta’s budget promises more help for COVID-19 with a hard deficit

Alberta’s budget promises more help for COVID-19 with a hard deficit

EDMONTON — Alberta’s COVID-19-era budget made a hard landing Thursday with an $18.2-billion deficit but also a promise that good times will return.

Finance Minister Travis Toews said a continued vaccine rollout and more businesses opening up should put Alberta on track to start its rebound in the back half of this year.

“Alberta’s economy is now expected to reach pre-COVID levels by 2022, one year earlier than expected,” Toews told a news conference prior to introducing the 2021-22 budget in the legislature.

“(But) Albertans continue to face one of the most difficult times in our history. We’re ensuring that we’re resourcing our health-care response adequately to meet the pandemic challenge (and) we’re positioning the economy for growth and a rebound.”

For now, the eye-popping deficits continue — $20.2 billion for the fiscal year ending March 31 and $18.2 billion forecast for the coming fiscal year.

Toews and Premier Jason Kenney have called Alberta’s economic bludgeoning a rare “triple black swan” caused by the pandemic, the resulting global recession and an oil-price war that further depressed prices.

The medium-term outlook is for more red ink. Alberta is on track to carry $98 billion in tax-supported debt this year, rising to more than $132 billion by 2024. The province’s debt a decade ago was $5.1 billion.

Annual spending on debt interest is closing in on $3 billion.

The budget delivered on promises to avoid tax increases in a province that has the lowest per-capita tax regime in Canada — and is the only one with no retail sales tax.

The fiscal plan calls for $57 billion in spending, along with a minimum $1.1 billion to fight COVID-19 and another $1.8 billion in pandemic spending if needed. That’s on top of $5.8 billion in COVID-19 spending last year.

The health budget is to rise by about $1 billion to $21.4 billion.

Opposition Leader Rachel Notley said the budget fails on multiple fronts.

“It’s a little bit of a deer in the headlights budget. It’s like they didn’t know what to do.”

The NDP leader said much of Kenney’s “so-called economic recovery plan” has no overarching strategy and consists of reannouncements of old policies or money from the federal government.

“(The plan) amounts to a couple hundred million dollars at best. This, out of a budget that includes almost $40 billion in expenses.”

Notley suggested the budget continues to undermine services across the board — either through direct reductions or by failing to fund for population growth and inflation.

“Albertans will pay for Jason Kenney’s mistakes in many, many ways but ultimately the greatest cost is going to be that of lost opportunity.”

Non-renewable resource revenues, the traditional foundation of Alberta’s economy, are expected to bring in $2.9 billion, about half of what they were before the pandemic.

Oil prices have rebounded in recent weeks to above US$60 a barrel for the benchmark West Texas Intermediate, but Toews said the province can’t count on or budget for renewed boom times.

“We’re focused on what we can manage … and we’re looking to ensure that we’re delivering government services most efficiently.”

Toews said the United Conservative government remains committed to reducing public-sector, per-capita spending to match that in comparable provinces such as British Columbia and Ontario.

Indicators suggest the overall fiscal future, while not rosy, is brighter. Real gross domestic product, or GDP, is expected to rise 4.8 per cent this year after a 7.8 per cent decline in 2020.

Alberta’s unemployment rate, estimated at 11.4 per cent last year, is expected to slowly decline to 7.3 per cent by 2023, close to its pre-pandemic level.

University of Calgary economist Trevor Tombe said the budget continues “kicking the can down the road” in terms of hard decisions to find revenue to get the books back into balance.

He said even with the reduced spending as planned by 2022, the government will need to find billions of dollars of new money.

But he noted the budget’s most optimistic scenario — West Texas Intermediate oil averaging US $64.50 a barrel by 2023 — could reduce the deficit to as little as $3.4 billion and give the government a chance to balance the books while avoiding dreaded tax hikes in an election year.

“They’ve got to be hoping that oil prices rise and spare them those tough decisions,” said Tombe.

“This is in the grand tradition of Alberta governments for decades.”

This report by The Canadian Press was first published Feb. 25, 2021.

Dean Bennett, The Canadian Press

Alberta budget

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Red Deer Rebels forward Ethan Rowland battles with Medicine Hat Tigers forward Brett Kemp during WHL action at the Centrium Saturday night. (Photo by ROB WALLATOR/Red Deer Rebels)
Tigers claw back, hand Rebels 11th straight loss

Tigers 5 Rebels 2 The same old issues continue to plague the… Continue reading

There were six additional deaths across Alberta reported over the past 24 hours, bringing the death toll to 1,926 since the beginning of the pandemic. (File photo)
AstraZeneca vaccine is ready to be used at a homeless shelter in Romford, east London, Wednesday, Feb. 3, 2021. THE CANADIAN PRESS/AP-Frank Augstein
AstraZeneca-linked blood clot confirmed in Alberta

A case of an AstraZeneca-linked blood clot has been confirmed in Alberta,… Continue reading

The Red Deer Catholic Regional Schools Board of Trustees selected the name St. Lorenzo Ruiz Middle School to be built in the north end of Red Deer. (Photo Courtesy of  Red Deer Catholic Regional Schools)
Red Deer Catholic Regional Schools raises about $8,720 for Terry Fox Foundation

Red Deer Catholic Regional Schools raised about $8,720 for the Terry Fox… Continue reading

A nurse gets a swab ready at a temporary COVID-19 test clinic in Montreal, on Friday, May 15, 2020. Health Canada has reversed course on home test kits for COVID-19, saying it will now review applications for such devices. THE CANADIAN PRESS/Paul Chiasson
Alberta declines Ontario’s request to send health-care workers

Alberta is “not in a position” to send health-care workers out of… Continue reading

Red Deer Public Schools will not pilot the new draft curriculum at its elementary schools. (File photo contributed by Red Deer Public Schools)
UPDATED: Red Deer Public Schools says no to piloting new curriculum

Alberta Teachers’ Association support school boards

Ontario Premier Doug Ford points on a COVID-19 caseload projection model graph during a press conference at Queen's Park, in Toronto, Friday, April 16, 2021. Ontario was set to backtrack on controversial new police powers to enforce stay-at-home orders implemented in the battle against COVID-19.THE CANADIAN PRESS/Frank Gunn
Ford backtracks on new police COVID-19 powers amid intense backlash

TORONTO — Furious criticism of new anti-pandemic powers that allow police in… Continue reading

The official program for the National Commemorative Ceremony in honour of Prince Philip, The Duke of Edinburgh, sits on an empty pew prior to the ceremony at Christ Church Cathedral in Ottawa on Saturday, April 17, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Prince Philip remembered as ‘a man of great service’ during Canada’s memorial service

Canada’s commemorative ceremony in honour of the late Prince Philip offered a… Continue reading

CF Montreal head coach Wilfried Nancy speaks to his players during the team's practice Tuesday, March 16, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
CF Montreal puts on a show, defeating Toronto FC 4-2 in MLS season opener

FORT LAUDERDALE, Fla. — CF Montreal, carving open Toronto FC’s defence, cruised… Continue reading

Demonstrators using umbrellas as shields approach a point in a perimeter security fence during a protest over the fatal shooting of Daunte Wright during traffic stop, outside the Brooklyn Center Police Department, Friday, April 16, 2021, in Brooklyn Center, Minn. (AP Photo/John Minchillo)
Journalists allege police harassment at Minnesota protests

Some journalists covering protests over the police fatal shooting of Daunte Wright,… Continue reading

A container ship is docked in the Port of Montreal, Wednesday, February 17, 2021 in Montreal.THE CANADIAN PRESS/Ryan Remiorz
Montreal dockworkers begin weekend strikes as talks drag on

MONTREAL — Dockworkers at the Port of Montreal kicked off a series… Continue reading

Brad Dahr, 53, is facing numerous charges. (Photo contributed by Alberta RCMP)
Alberta man charged for alleged sexual offences against children

An Edmonton man has been charged for alleged sexual offences against children… Continue reading

A person walks past a COVID-19 mural designed by artist Emily May Rose on a rainy day during the COVID-19 pandemic in Toronto on Monday, April 12, 2021. Employment lawyers say flouting COVID-19 public health orders when off the job or coming into work while knowingly sick could warrant discipline in the workplace. THE CANADIAN PRESS/Nathan Denette
Risky pandemic behaviour off the clock could mean workplace discipline: lawyers

CALGARY — Employment lawyers say flouting COVID-19 public health orders when off… Continue reading

Vials containing Russia's Sputnik V vaccine for COVID-19 are seen at the San Marino State Hospital, in San Marino, Friday, April 9, 2021.  THE CANADIAN PRESS/AP-Antonio Calanni
China, Russia using their COVID-19 vaccines to gain political influence

OTTAWA — China and Russia have been using their locally produced COVID-19… Continue reading

Most Read