Budget picture looking rosier, but gains to be offset by flood costs

Alberta’s budget is doing much better than expected this year, but any gains will be offset by the costs from last summer’s catastrophic floods, Finance Minister Doug Horner said Tuesday.

EDMONTON — Alberta’s budget is doing much better than expected this year, but any gains will be offset by the costs from last summer’s catastrophic floods, Finance Minister Doug Horner said Tuesday.

“Alberta has turned a corner despite challenges and because of the new course we set out on Budget 2013,” Horner said as he revealed the mid-point update for the current fiscal year.

“The efforts in the first six months of this fiscal year have given us the fiscal and economic strength to manage after the flood.”

The year’s budget originally forecast a deficit of $451 million for day-to-day operational spending, but higher than expected oil royalties have morphed that number into a $1-billion surplus, Horner said.

But the government still expects to be about even at the end of the year due to the millions of dollars needed to help southern Alberta recover from the floods, he said.

About 100,000 people were displaced and more than 14,000 homes were damaged as rivers rose to incredibly high levels after a steady downpour that soaked the area in June.

The province expects it will have paid about $1.7 billion when recovery and flood mitigation efforts are completed years down the road. The federal government will chip in $2.8 billion under a federal disaster recovery program, but that number is expected to go higher.

Private insurers are expected to pay $1.7 billion.

This week, Horner asked the legislature to approve $764 million in additional funds this year to start paying flood bills. Additional requests are expected to be deferred to the spring.

About $351 million has already been spent on flood relief.

Opposition politicians suggested Horner’s rosy financial picture is a mirage because he isn’t including billions of dollars the government is borrowing to pay for new roads, schools, hospitals and other infrastructure.

The government plans to borrow a total of $17 billion by 2016.

The opposition said the government is on track to run a consolidated deficit of more than $2 billion when the borrowing figure is included.

“Same old story: record revenue, more debts and more deficits,” said Wildrose finance critic Rob Anderson.

“Minister Horner obviously talks about turning a corner. I hear the Edmonton Oilers have turned a corner as well,” added Anderson, who was referring to his favourite — and struggling — pro hockey team.

“The consolidated cash deficit is in the area of $3 billion to $4 billion.”

Derek Fildebrandt of the Canadian Taxpayers Federation pegged the deficit at $2.3 billion.

“That is an improvement over the last two to six months, no doubt, although it rests almost exclusively on higher than expected revenues,” said Fildebrandt.

NDP Leader Brian Mason said while the news is good now, it can reverse just as easily until the province stops relying so heavily on mercurial bitumen prices and begins to take in more oil royalties.

“The royalty roller-coaster and the bitumen basket are things that are seriously hampering the government’s ability to solve its financial problems in the long run,” said Mason.

Liberal critic Kent Hehr agreed: “We are in a system that is not stable, it’s not based in fact, and the government is running away from any responsibility to fix Alberta’s fiscal structure.”

Among the second-quarter highlights:

— Revenue was $20.3 billion, which is $1.4 billion higher than expected.

— Expenses were $19.3 billion, an increase due mainly to flood recovery.

— Overall, there was a $1.1-billion operational surplus after the first six months of the fiscal year.

Just Posted

Downtown Red Deer was packed with people who lined the streets to watch the Westerner Days parade on Wednesday. (Photo by SUSAN ZIELINSKI/Advocate staff)
Westerner Days parade cancelled, full details on modified event coming June 28

The 2021 edition of Westerner Days will look much different than any… Continue reading

City council wants to hear from the public at a May 25 hearing about whether the temporary homeless shelter should be allowed to remain in the downtown for another year. (Advocate file photo).
City of Red Deer staff to recommend another extension to allow operations at current temporary shelter site

Following some more research city administration has received no other new locations… Continue reading

A scene from the short Western ‘Cheaters, Robbers and Outlaws,’ written and directed by Jason Steele, with support from Telus Storyhive. (Contributed image)
Red Deerians make ‘Cheaters, Robbers and Outlaws’ short Western film

Writer and director Jason Steele received a $20,000 Storyhive grant from Telus

Residents in several neighbourhoods reported little to no water pressure Tuesday night. (File photo by Advocate staff)
City hall to reopen for payments and customer service

Red Deer City Hall will reopen on June 21 for utility and… Continue reading

Char Rausch was selected as this year’s recipient of the Bob Stollings Award, which goes to an employee who has displayed outstanding civic performance in alignment with The City’s Cornerstone Values – Respect, Integrity, Service and Excellence. (Photo courtesy City of Red Deer)
Char Rausch wins City of Red Deer Bob Stollings Award

The City of Red Deer is honouring employees differently this year. With… Continue reading

Montreal Canadiens goaltender Carey Price stops Vegas Golden Knights' William Karlsson as he is covered by Canadiens' Joel Edmundson during first period of Game 3 of the NHL Stanley Cup semifinal Friday, June 18, 2021 in Montreal. THE CANADIAN PRESS/Paul Chiasson
Andreson’s timely scoring, Price’s goaltending give Habs 2-1 series lead over Vegas

Canadiens 3 Golden Knights 2 (OT) (Montreal leads series 2-1) MONTREAL —… Continue reading

Atlanta Hawks guard Trae Young (11) is defended by Philadelphia 76ers guard Ben Simmons (25) as he looks for an opening during the first half of Game 6 of an NBA basketball Eastern Conference semifinal series Friday, June 18, 2021, in Atlanta. (AP Photo/John Bazemore)
Curry, Harris help 76ers stay alive, hold off Hawks 104-99

76ers 104 Hawks 99 (Series tied 3-3) ATLANTA — Seth Curry hit… Continue reading

Canadian Prime Minister Justin Trudeau is seen during a joint news conference following the EU-Canada Summit, in Brussels, Belgium, Tuesday June 15, 2021. Trudeau says Canada is on track now to have 68 million doses delivered by the end of July, which is more than enough to fully vaccinate all 33.2 million Canadians over the age of 12. THE CANADIAN PRESS/Adrian Wyld
Vaccine deliveries enough to fully vaccinate all eligible Canadians by end of July

OTTAWA — Prime Minister Justin Trudeau’s promise of a two-dose fall is… Continue reading

Marco Mendicino, Minister of Immigration, Refugees and Citizenship, speaks during a press conference in Ottawa, Thursday, May 13, 2021. Mendicino has announced a new policy to help settle 500 refugees and their families in a news conference today. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year: Immigration Minister Marco Mendicino

Immigration Minister Marco Mendicino announced plans to expedite applications and increase the… Continue reading

Louis Oosthuizen, of South Africa, plays his shot from the third tee during the second round of the U.S. Open Golf Championship, Friday, June 18, 2021, at Torrey Pines Golf Course in San Diego. (AP Photo/Marcio Jose Sanchez)
Bland leads at Torrey and shows the US Open is truly open

SAN DIEGO — The U.S. Open prides itself on being the most… Continue reading

The Prime Minister's car waits outside the National Microbiology Laboratory in Winnipeg Tuesday, May 19, 2009. The head of the Public Health Agency of Canada is showing no sign he'll release unredacted documents about the firing of two scientists at Canada's highest security laboratory — despite the prospect of being publicly shamed in the House of Commons for his refusal to turn them over. THE CANADIAN PRESS/John Woods
PHAC head maintains he’s bound by law not to release docs on fired scientists

OTTAWA — The head of the Public Health Agency of Canada is… Continue reading

Chief Public Health Officer Theresa Tam listens to a question during a news conference, in Ottawa, Tuesday, Jan. 12, 2021. The number of confirmed COVID-19 cases attributed to the highly contagious Delta variant grew in Canada this week. THE CANADIAN PRESS/Adrian Wyld
Public health agency reports spike in confirmed cases of Delta variant in Canada

OTTAWA — The number of confirmed COVID-19 cases attributed to the highly… Continue reading

Various vaping nicotine e-liquids or "juice" are shown in a lab at Portland State University in in Portland, Ore., Tuesday, April 16, 2019. The federal government says it wants to ban most flavoured vaping products in a bid to reduce their appeal to youth. THE CANADIAN PRESS/AP-Craig Mitchelldyer
Health Canada proposes ban on most vaping flavours it says appeal to youth

The federal government says it wants to ban most flavoured vaping products… Continue reading

Most Read