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The Government of Alberta has a plan to move Alberta forward and Budget 2010 delivers on this plan. It advances Alberta's competitiveness. It holds the line on taxes. It positions Alberta to be back in the black in three years. Budget 2010 strikes the right balance between carefully managing our spending and protecting priority programs like health, education and supports for those in need. |
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Budget 2010 strikes the right balance and readies Alberta for the future
Budget 2010 supports Alberta's four-point economic plan, The Way Forward, and government's vision of having:
- the strongest financial position of all provinces going into economic recovery;
- the most innovative and competitive economy in Canada;
- the best health care system in the country; and
- the most advanced infrastructure in North America.
Key highlights:
- back in the black in three years;
- no new taxes or tax increases;
- a new five-year funding commitment between government and Alberta Health Services;
- increased funding for school boards;
- benefits for seniors and the most vulnerable Albertans maintained at current levels;
- $20-billion capital plan to build and improve schools, hospitals, roads, affordable housing, water infrastructure, community facilities and parks; and
- more than $5 billion for municipal infrastructure over three years.
Albertans have said government shouldn't touch the Heritage Fund and we won't. The Heritage Fund is our long-term investment for the future. Thanks to good financial planning, including $17 billion saved in the Sustainability Fund, Alberta has been able to weather the recession without making deep cuts to core programs or jeopardizing the province's fiscal strength. This means Albertans will continue to have access to the priority public services they rely on.
The province continues to find efficiencies and savings. In light of Alberta's improved economic outlook, the government is investing the savings found last year into priority areas like health, education and supports for seniors and vulnerable Albertans.
Economy
Spurred by strengthening investment, particularly in the oil sands, Alberta's economy is expected to grow by 2.6 per cent in 2010, followed by growth of 2.9 per cent in 2011, 3.0 per cent in 2012, and
3.1 per cent in 2013. The labour outlook is also expected to improve, with an increase in average employment of 15,000 jobs this year over last year and an unemployment rate forecast to average
6.6 per cent in 2010, falling to 6 per cent in 2011, 5.3 per cent in 2012, and 4.9 per cent in 2013.
New 5-year health funding plan
The Alberta government's vision is to create the best performing public health-care system in Canada. To achieve this vision, the government will provide stable and predictable funding for health that is tied to greater accountability, more transparency, and patient-focused outcomes. This five-year plan will include predictable operating funding and new, province-wide performance measures for the health system.
Health and Wellness spending includes one-time funding of $759 million and $14.3 billion of base funding for a total of $15 billion, which will be allocated as follows:
- One-time funding of $759 million includes: $719 million towards Alberta Health Services' (AHS) projected deficit; and $40 million to cover pension adjustments for AHS staff.
- Base funding includes: $9 billion for AHS base operating costs; and $5.3 billion for other health-care costs (e.g. physician compensation, prescription drugs, community programs and healthy living, etc.).
Performance measures currently in development will support the objectives of this five-year funding plan starting April 1. The measures will provide Albertans with greater transparency, more accountability for how their health system is performing, and additional opportunities for input and engagement.
Operating Expense
The Government of Alberta's operating expense is forecast to increase by 5.6 per cent, or $1.7 billion, to $33.2 billion in 2010-11. This includes the one-time payment of $759 million to Alberta Health Services. When this payment is factored out, operating expense increases by 4.3 per cent, somewhat more than population growth and inflation which total 3.5 per cent.
Increases to basic education and supports for seniors and vulnerable Albertans are offset by savings and efficiencies found in other areas of government.
Capital Spending
The 2010-13 Capital Plan supports $20.1 billion in capital projects, including $7.2 billion in
2010-11. The government's commitment to previously announced projects remains firm, although total spending over the next three years will be reduced due to lower construction costs and re-profiling. This investment in infrastructure, which is nearly double the per capita average of other provinces, will support about 70,000 jobs this year alone.
Revenue
Total revenue in 2010-11 is forecast to increase by $423 million from the previous year to
$34.0 billion, an increase of 1.3 per cent. Revenue is forecast to continue to rise as economic recovery takes hold, increasing to $37.3 billion in 2011-12, and $40.2 billion in 2012-13.
Resource revenue is forecast to increase by $1.3 billion, or 21.7 per cent, to $7.3 billion in
2010-11, and grow to $9.3 billion by 2011-12 and $10.4 billion by 2012-13. The global economic recovery is expected to increase prices and demand for oil, and natural gas prices are expected to be boosted by an improved North American economy, although higher supplies from U.S. shale gas development and liquefied natural gas imports are likely to limit any increases.
Deficit
Budget 2010 forecasts a deficit of $4.7 billion for 2010-11. The deficit for 2011-12 is forecast to be
$1.1 billion, with a return to a balanced budget and a modest surplus of $505 million for 2012-13. The deficits will be offset by transfers from the Sustainability Fund, as will the forecast deficit of $3.6 billion for 2009-10.
The Sustainability Fund is set aside to manage revenue volatility and protect priority programs during economic downturns. Government will resume deposits to the fund when it returns to surpluses.
For more information visit the Budget 2010 website.
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Highlights of the 2010 Speech from the Throne
I am also pleased to highlight the key initiatives our government laid out in the February 2010 Speech from the Throne.
Alberta's Fiscal Advantage:
- use our fiscal advantages, including low taxes and the nearly $25 billion that was saved and invested during good times, to position Alberta for a strong recovery;
- keep using the Sustainability Fund to protect municipalities, social programs, educational institutions and the health care system;
- continue to strengthen infrastructure in all regions of the province;
- introduce Alberta Capital Bonds with proceeds directed to building seniors' accommodations; and
- carefully manage government spending, with a focus on key priorities such as health, education and supports for vulnerable Albertans.
Improving Health Care:
- act on the recommendations of the Minister's Advisory Committee on Health to make the publicly funded health system more patient-focused;
- develop a new Alberta Health Act;
- provide stable, five-year funding to Alberta Health Services;
- focus on better performance in key areas such as wait times and access; and
- seek input from, and be accountable to, Albertans on whether the health system is performing to their expectations.
Building Safe, Caring Communities:
- address gang crime through the Alberta Gang Reduction Strategy;
- table witness protection legislation;
- bolster the front lines of Alberta police forces with 100 new officers;
- meet government's goal of creating 14,000 new child care spaces;
- work with partners to develop 11,000 affordable housing units by 2012, and act on the Ten-Year Plan to End Homelessness;
- better integrate social programs to improve service to their clients; and
- continue to advocate for reforms to the retirement income system, and if feasible, join with BC and Saskatchewan to develop options for a regional retirement income plan.
A Clean Energy Future:
- continue the fight against the mountain pine beetle;
- work with Ottawa to reach a continental approach to controlling greenhouse gas emissions;
- develop new opportunities to participate in markets like China and India, while securing access to the emerging clean energy market in the U.S.;
- continue to promote Alberta and the technological advances Alberta industries have made in environmental management, such as their work on carbon capture and storage; and
- continue to invest in research and technology solutions to environmental challenges posed by oil sands development, including the eventual elimination of tailings ponds.
Alberta's Place in Canada:
- pass Bill 1, The Alberta Competitiveness Act, which will enhance Alberta's competitiveness and provide long-term benefits for Albertans;
- seek fair treatment for Albertans under universal federal programs;
- use expert advice from the Premier's Council on Economic Strategy to set a path to a secure and prosperous future for Albertans;
- share Alberta's story at the Olympics, and elsewhere on the global stage, to promote our province; and
- continue to build world-class universities of the 21st century.
Watch the Speech from the Throne, or visit www.mypcmla.ca for more information.
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