Central Alberta budget watchers saw some positives in the NDP’s spending plans.
However, concerns remain about the size of the projected debt and the government’s rosy economic projections.
Red Deer and District Chamber of Commerce gave the budget a “pretty good” rating.
“It was good to see stable and predictable funding for things like infrastructure, health and education,” said Reg Warkentin, policy co-ordinator for the chamber.
“We did a survey back in February and we heard pretty resoundingly that our members did not want to see cuts in service in those areas.”
However, there is concern about the debt levels envisioned by the NDP government, which will hit $47 billion by around 2019-20. The budget is not projected to be balanced until the same year.
“That’s always alarming. But it was good to see the spending controls they put in place, to really make that strong commitment that they are going to get spending under control and just basically increase it with inflation.”
The government has committed to bringing in legislation capping borrowing at 15 per cent of GDP.
Small and medium-sized businesses might also benefit from budget initiatives offering improved access to capital, although the details are still unclear. A $5,000 employment credit may also be useful for businesses on the cusp of hiring.
Access to labour and capital are the biggest challenges for many entrepreneurs, he said.
A proposed increase in corporate taxes was unveiled months ago and was no surprise.
There is some uneasiness that the government is turning to its contingency fund to help make ends meet. As well, it is clear resource revenue is being banked on to provide a major source of future revenue.
Red Deer Mayor Tara Veer said the city is “satisfied” with the government’s spending program, which does not hold any surprises for the current budget year.
Questions remain about the government’s future plans, both in municipal grant levels and support for big-ticket capital projects, such as a south Red Deer overpass, the north highway connection across the river and a new courthouse.
The city remains hopeful those projects and local schools will be included in the government’s plan to increase infrastructure spending.
Municipal Sustainable Initiative funding — which provided $24 million to the city this year — remain stable for now, but there are indications it may be reduced in future years, which would have a direct impact on city spending projections.
Veer said the city was pleased to see Red Deer College will get $20 million towards the proposed Centre for Health, Wellness and Sport, a key facility for the 2019 Canada Winter Games.
It is also hoped the province’s pledge to increase long-term care support will mean money for the Piper Creek Foundation’s plans for affordable seniors housing.
Total funding for Family and Community Support Services, which supports many local social support programs, is being increased by $25 million. Some of that will trickle down to Red Deer, requiring an increase to the city’s 20 per cent matching portion.
Veer said the city expects to have a clearer take on what the budget will mean locally in the next few days.
Innisfail-Sylvan Lake Wildrose MLA Don MacIntyre said the NDP’s plans are “kinda scary.
“It seems like this government is determined to try to borrow or tax their way to prosperity and, of course, that doesn’t happen in the real world,” said MacIntyre.
The government made no effort to cut costs, instead, racking up $26.8 billion worth of deficits to 2018 and pushing the debt to $47 billion.
“These are really risky economic theories they’ve got on the go and they’ve packaged it with a lot of record taxes, record deficits and record debt.”
Even hitting those numbers relies on rosy economic predictions and a 25 per cent increase in provincial revenues over the next three years.
MacIntyre said money is better left with taxpayers to spend than government and he is dismayed that the size of government will continue to increase.
With a population of only four million Alberta shoudn’t be saddled with a $47 billion debt.
“This is just unconscionable. It’s just plain wrong.”
Ron Orr, Wildrose MLA for Lacombe-Ponoka said wryly “it’s definitely an NDP budget.”
Orr said while it could have been worse he is opposed to racking up $47 billion in debt and multiple deficit budgets.
The province will end up having to pay almost $1.3 billion a year just to cover its debt interest, he said.
“It’s a huge, huge number in a lot of ways,” he said, adding the debt will take many years to pay off.
Like MacIntyre, Orr was unhappy how little effort the government made to find savings. The auditor general’s annual report has provided many examples of wasteful spending that could have been pursued, he said.
The NDP’s budget balancing strategy relies on economic growth numbers that never seem to occur on the timelines one hopes, he said.
“It seems like the good numbers are always four to five years out, and the reality numbers are always the ones right on your doorstep.”
If revenue or expenses are off, even by a single percentage point, the government’s financial plans won’t work, he said.