EDMONTON — Alberta is expected to deliver a budget that reaffirms unrivalled spending on roads, hospitals and schools despite a bottom line stuck in red ink.
Premier Ed Stelmach’s government says the plan shows steely resolve in rocky times, while critics liken it to pie-eyed sailors on shore leave.
“The time to build is when the cost of building is less,” Infrastructure Minister Ray Danyluk said Wednesday.
It’s the most spending per capita in Canada, he added.
“This is the opportune time.”
Finance Minister Lloyd Snelgrove’s budget Thursday is expected to include another $7 billion in capital spending. It will be the second instalment of a three-year, $20-billion plan to shore up infrastructure that was left to lag in the oil-boom years while the province’s population soared to 3.7 million.
Stelmach has already signalled the 2011-12 financial document will include a third-consecutive deficit on top of a $5-billion shortfall this year.
The Wildrose Alliance and the Alberta Liberals suggest infrastructure money should be stretched out for two additional years to help the government’s wallet.
“We’re spending double on infrastructure of any other province, which is quite a feat when you consider Vancouver just had the Olympics,” said Wildrose Leader Danielle Smith.
She said construction is needed, but must be based on sound economics, not wish lists.
“We’re building infrastructure we can’t afford to maintain or staff,” she said. “It would be far better for us to slow down the pace of this development to a point where it’s sustainable.”
Liberal Leader David Swann added that infrastructure doesn’t have to carry all the burden to balance the budget.
He said his party would, among other targets, halve the government’s controversial $2-billion carbon capture and storage plan, and axe the government’s communications arm to free up $1.6 billion.
“Double-digit spending per capita on infrastructure isn’t justified in the deficit position we’re in,” said Swann.
But Snelgrove said the government doesn’t have the luxury of waiting when there are thousands more cars on the roads and thousands more families relying on basic services.
He challenged his opponents to decide which community doesn’t get a school.
“We’ve got a good plan, and we’re sticking with it,” he said.
“I think if you want to go ask the Wildrose or Liberals or whoever what aren’t they going to build right now, you may have a better discussion.”
The topic strikes to the heart of a philosophical debate that not only rages in the legislature but has also put the political agenda in flux.
Stelmach announced last month he will quit later this year. Four candidates have already announced they’ll run to replace him.
He was reportedly facing an unbridgeable caucus divide between those who want to spend now to keep critical projects going and those arguing for restraint.
Stelmach believes infrastructure can’t wait and he’s pushed for deficit budgets. A report issued Wednesday by the Parkland Institute agrees with him.
The Edmonton-based think-tank said that while the current level of infrastructure spending is high, it’s not out of whack given the province’s population and inflationary pressures.
Research director Diana Gibson also estimated that putting off infrastructure building in the boom years means the province overspent by as much as $5 billion when it could wait no longer and had to bargain with over-stretched construction companies that could virtually name their price.
“Imagine the kind of infrastructure that ($5 billion) could’ve bought during the Klein budget cut years (of the early 1990s). All the industries that lost their shirts during that period could have had investment from government to help keep people working.”
Cutting back on infrastructure spending now would bring short-term relief but long-term grief, Gibson predicted.
“You cut infrastructure to those levels (suggested by the opposition), it negatively impacts productivity and economic growth.”