EDMONTON — Finance Minister Ted Morton concedes that Alberta has taken a political gamble with a budget that pours money into health care while draining rainy-day savings.
“No gambit is risk free,” Morton told a radio talk show Wednesday. “This isn’t a risk-free budget. We’re trying to manage risk.”
The new budget forecasts a record $4.7-billion deficit, while piling up $6 billion in new debt to pay for building projects over the next three years. Total spending is pegged at $38.7 billion — a six per cent increase.
The long-governing Tories are currently facing a challenge from the Wildrose Alliance, a fiscally conservative upstart with only three members in the legislature, but momentum in the polls.
Business groups have been critical of the spending document in the early going, especially in light of Premier Ed Stelmach’s oft-repeated promise to trim Alberta’s deficit by $2 billion — something that didn’t materialize.
There were $1.3 billion in cuts from several different departments, but those savings were mainly redirected to the health ministry, which now accounts for over 40 per cent of total spending, or nearly $15 billion.
In the run-up to the budget, Morton had been promising to end the “all-you-can-eat” buffet of spending that many Albertans had come to expect. Morton, a fiscal hawk who once advised the federal Reform party, stuck with that metaphor Wednesday, but he appeared to soften the message.
“I said we’re going to begin to close the buffet down and we are. I said we’re not going to do some fad crash diet.”
“They didn’t find $2 billion in cuts,” said Scott Hennig, with the Canadian Taxpayers Federation. “They can say they did all they want. It’s baloney.”
Morton says Alberta was forced to adjust its priorities because of “the worst recession since the 1930s.”
But Wildrose Alliance Leader Danielle Smith said Alberta is getting only mediocre results when it comes to services, despite having the second-highest per-capita spending in Canada.
“Our health service isn’t that much better than what’s in British Columbia or Ontario and Saskatchewan,” said Smith. “And yet they’ve managed to deliver a fairly comparable system for a lot less money.”
Smith released an alternative budget that would slow down project spending and scrap expensive carbon capture projects, which the government is pouring money into as part of its plan to clean up its image on climate change.
“At some point, the PC government has to realize that hope is not a strategy,” she said. “Albertans deserve better.”
The government also faced some harsh criticism Wednesday from Calgary Mayor Dave Bronconnier, who is outraged over losing $150 million in project funding.
Bronconnier is threatening legal action because he says the city has already spent some of the promised funding and a shortfall will put projects “in peril.”
But Edmonton Mayor Stephen Mandel said he’s not worried about any delay in project funding.
“We expect that if times get tough, we should participate in the changes,” Mandel said in an interview.
“In the next few years, we’ll see Alberta begin to turn around and we’ll gain back what might have been reduced in budgets of the last couple of years.”
A government spokesman said Calgary and other communities will get promised funding, but over a longer period because of the recession.