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Report from the
Legislature
Budget 2007 addresses growth
The
Government of Alberta is
aggressively managing growth
pressures and addressing the price
of the province’s prosperity by
making significant investments in
infrastructure, services and
municipal support.
On April 19th, Finance Minister Dr.
Lyle Oberg tabled Alberta’s 14th
consecutive balanced budget,
designed to meet the demands of a
provincial economy that led the
nation in growth last year and a
population that increased by 100,000
people.
Budget 2007 provides $33 billion
dollars for programs and capital
grants in 2007-08 and the government
is anticipating a $2.2 billion
surplus.
Operating spending will increase 10
per cent overall, including
increases for health care and
advanced education. This will
alleviate pressure on core service
delivery and allow the Alberta
government to move forward on
important issues such as the
environment, policing, children’s
services and workforce development.
The three-year Capital Plan will
provide $18.2 billion for municipal
infrastructure, schools, roads,
health facilities, post-secondary
institutions, housing, water
infrastructure and a new two-year
grant program to upgrade and
construct community facilities.
Per person, Alberta’s spending on
infrastructure is nearly four times
higher than the average of other
provinces, unmatched in the rest of
Canada.
The Stelmach government is following
through on a commitment to create a
long-term funding arrangement with
municipalities. The Municipal
Sustainability Initiative will help
communities address their growth and
sustainability needs in areas
ranging from core infrastructure to
water projects and affordable
housing. The first year of the
agreement will see $400 million in
funding, ramping up to $1.4 billion
per year by 2010-11.
Revenue is not expected to repeat
the extraordinary performance of
last year, declining to about $35
billion in 2007-08. This is due to
an expected decrease in energy
revenue and more moderate economic
growth over the coming year.
The Alberta government recognizes
that we cannot maintain the present
pace of operating fund increases.
Funding levels must be sustainable
and fiscally responsible if Alberta
is to maintain its prosperity and we
are taking steps to strengthen our
fiscal management practices and
ensure there is a disciplined
approach to government spending.
The Treasury Board ministry will
play a key role in ensuring tight
limits on in-year operating spending
and will review government programs
to identify efficiencies and better
co-ordinate capital and operating
planning.
A new in-year surplus allocation
policy will determine how revenue
above the expected surplus will be
allocated. If the projected surplus
is higher than the current estimate
of $2.2 billion, one-third of the
additional cash available will go to
savings and investments, while the
remaining two-thirds will be
allocated to capital. Recognizing
the importance of keeping existing
capital assets in good shape, at
least 50 per cent of the capital
allocation will be used to address
capital maintenance and replacement
requirements.
Albertans continue to enjoy the
lowest overall taxes in Canada.
Income tax initiatives outlined in
Budget 2007 will save Albertans
nearly $200 million annually and
save businesses about $22 million in
2007. These changes include
increases to tax credits for
post-secondary students and
charitable donations.
This year’s budget is based on the
five priorities established to guide
government actions. Those priorities
include governing with integrity and
transparency, managing growth
pressures, improving Albertans’
quality of life, building a stronger
Alberta and providing safe and
secure communities.
Government
takes initial step to address
teachers' portion of unfunded
pension liability
The
government has submitted a letter to
the Alberta Teachers' Association
(ATA) to commence discussions on
seeking a fair, final and lasting
solution to the teachers' portion of
the pre-1992 unfunded pension
liability.
Since it was established in the late
1930s, the teachers' pension fund
has been underfunded by its two
primary sponsors - the ATA and the
provincial government. In 1992, the
Government of Alberta accepted
responsibility for two-thirds of the
liability (now $4.3 billion), while
teachers accepted responsibility for
one-third (now $2.1 billion).
In accordance with the 1992
agreement, in 2007 government will
contribute over $357 million ─ $200
million, or 8.39 per cent of
teachers' salaries, for current
service pension payments plus an
additional $157 million, or 6.38 per
cent of teachers' salary, for the
unfunded pension liability. As of
September 1, 2007, 3.1 per cent of a
teacher's salary will go towards
this liability.
The Government of Alberta has
submitted a letter to the ATA to
seek a solution to this issue. The
letter has two components:
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a task force which will
research and consider
options to address the
teachers' share of the
unfunded pre-1992
pension liability; and
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as a sign of good faith,
the Government of
Alberta will assume, for
one year: |
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100 per cent of
contributions for
teachers with one to
five years of experience
(about $1,400 on a
salary of $50,000
annually); |
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75 per cent of
contributions for
teachers with six to 10
years of experience
(about $1,300 on a
salary of $60,000
annually); |
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50 per cent
contributions for
teachers with 11 to 15
years of experience
(about $1,200 on a
salary of $75,000
annually); and |
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25 per cent
contributions for
teachers with 16 to 20
years of experience
(about $650 on a salary
of $80,000 annually). |
$25 million
in student assistance changes to
support post-secondary students
Significant changes to the student
assistance program totaling $25
million will be implemented by the
Alberta government before students
begin classes this fall.
The changes include:
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increasing living
allowances by 14 per
cent (the first double
digit living allowance
increase introduced by
the province);
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eliminating vehicle
restrictions (as of
August 1, a student may
own a vehicle of any
value; currently, a
student with a vehicle
worth more than $5,000
has his or her financial
assistance reduced by
the vehicle's value over
the $5,000 maximum);
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increasing the annual
student loan limit to
$13,000 from $12,440
(the Alberta government
has increased its loan
limits annually for 14
consecutive years); and
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reducing parental
contributions (all
provinces and the
federal government have
agreed to this change
subject to the
availability of funding.
Parents are expected to
help pay for their
child's education if he
or she has been out of
high school for four
years or less, unless
their child has been
working or available to
work full-time for two
years). |
These measures are part of
government's Affordability
Framework, which includes immediate
and long-term initiatives to make
post-secondary education more
affordable to students. The
framework was developed as part of A
Learning Alberta, which sets out the
long term vision and policy
directions for the advanced
education system.
Students will also benefit from an
increase in the education tax
credit, which grows by 26 per cent
from $475 to $600 per month for
full-time students and from $143 to
$180 per month for part-time
students. The estimated benefit for
parents or students is $3 million in
2007, increasing to $10 million
annually in future years.
Government
responds to task force report with
$285 million in new funding
The province has increased the
housing budget by $285 million to
address immediate housing pressures
as identified by the Alberta
Affordable Housing Task Force
Report.
The cornerstone to this new funding
is the establishment of the new
Municipal Sustainability Housing
Program, which will provide $100
million each year for three years.
This funding will be targeted to
high-growth, high-need
municipalities to help ease growth
pressures in these communities. The
funding is part of the new Municipal
Sustainability Initiative, which
will provide municipalities with
long-term sustainable funding for
the next 10 years.
The government will also deliver $96
million for enhanced capital support
in 2007-08, absorbing this cost
within current resources. These
programs as well as our partnerships
with other orders of government and
the private and not-for-profit
sectors are expected to lead to the
development of more than 11,000
affordable housing units over the
next five years.
For renters, amendments will be
introduced in the current sitting of
the legislature that will limit rent
increases to once per year. This
will apply to both fixed-term and
periodic leases. The minimum
three-month notice on rent increases
will continue to be in place. As
well, under the amendments,
landlords wanting to end a tenancy
to do major renovations or to
convert a rental unit to a
condominium will need to provide at
least one-year notice. No rental
increases will be allowed during
that year. These changes will
involve amendments to both the
Residential Tenancies Act and the
Mobile Home Sites Tenancies Act. If
passed, the amendments will be
retroactive to April 24, 2007 and be
in effect for two years.
In addition, as recommended in the
Affordable Housing Task Force
report, the government will
introduce a province-wide program to
help landlords and tenants resolve
disputes outside of court.
The Residential Tenancies Dispute
Resolution Service, currently
running as a successful pilot
project in Edmonton, allows both
landlords and tenants to bring
forward disputes that are then heard
by a tenancy dispute officer, who
makes a binding decision on the
matter. The program is less
expensive and faster for landlords
and tenants than going to court.
The program will be made permanent
in Edmonton and the surrounding area
as of June 1 this year. It will
expand to Calgary in early 2008 and
then to Fort McMurray and Grande
Prairie before becoming a
province-wide service by 2010.
In addition, funding for the Rent
Supplement Program has increased by
$14.3 million to $33 million. A new
$7-million Homeless and Eviction
Prevention Fund will be established
to assist Albertans who may be at
risk of losing accommodations due to
rent increase and to assist
newcomers to Alberta who may need
temporary assistance until their
first paycheque arrives. As the
ministry responsible for income
supports and emergency funding for
Albertans with minimal resources,
Employment, Immigration and Industry
will administer the Homeless and
Eviction Prevention Fund.
The Affordable Housing Task Force
report is available on the Municipal
Affairs and Housing website at
www.municipalaffairs.gov.ab.ca
Government
boosts funding for arts, culture and
recreation
Budding artists, historians,
recreation groups and others focused
on building strong communities are
receiving increased support from the
provincial government in Budget
2007. This year's $9.1 million
increase brings funding available
from agencies that support the arts,
recreation, non-profit /voluntary
sector, inclusive communities and
the preservation of Alberta's
history to more than $74 million.
Five provincial agencies will share
the increase, helping address a
growing number of grant
applications. The Alberta Foundation
for the Arts (AFA) will receive
almost half the increase at $4.5
million, followed by the Alberta
Sport, Recreation, Parks and
Wildlife Foundation (ASRPWF) with an
increase of $3 million. The Alberta
Historical Resources Foundation will
see an $800,000 increase to its
budget and the Wild Rose Foundation
and the Human Rights, Citizenship
and Multiculturalism Education Fund
will each receive an additional
$400,000.
The AFA will allocate its additional
funding to grant programs that
support individual artists, arts
organizations and cultural
industries. Lottery funding to the
AFA has increased by 63 per cent
since 2002-03 and this year's
increase raises the foundation's
total budget to $27.3 million.
Government support for the arts
extends past the funding provided
through the AFA. This year, $500,000
is dedicated to the 2008 JUNO Awards
in Calgary and $4.5 million supports
the operations of the provincially
owned Northern and Southern Jubilee
Auditoria. Further government
support is provided to Alberta's
educational institutions, where over
5,000 students are enrolled
full-time in fine arts programs.
The Alberta Sport, Recreation, Parks
and Wildlife Foundation will use its
increase to support healthy living
and activities. The additional
funding raises the total budget of
ASRPWF to $26.6 million.
An increase of funds to the Human
Rights, Citizenship and
Multiculturalism Education Fund will
help further a society where all
people feel welcome and are included
in all aspects of life in Alberta
without discrimination. The
additional funding raises the budget
of the Education Fund to $2.2
million.
Additional funding to the Alberta
Historical Resources Foundation will
support Alberta's provincial
heritage societies as well as
provide grants through the Heritage
Preservation Partnership Grant
Program. This year's boost brings
the foundation's total budget to
$8.9 million. Funding for the Wild
Rose Foundation grows to $9.3
million, which will enhance
financial assistance to non-profit
and voluntary community, health and
social services organizations.
Funding for these provincial
agencies is provided through
revenues generated through the
Alberta Lottery Fund. More
information on these agencies can be
found at
www.tprc.gov.ab.ca |
