Alberta budget comes amid questions over resource development

Albertans are bracing for additional cuts Thursday as the province’s United Conservative government tables its budget for the upcoming fiscal year.

Released only four months after UCP’s first budget, Budget 2020 comes amid heightened turmoil due to job losses, union unrest and growing uncertainty around the province’s energy industry. 

On Sunday, Teck Resources withdrew an application for its Frontier project in northern Alberta, dashing hopes for the 7,000 jobs it would have created. 

Alberta’s treasury remains tied to the fortunes of the oil and gas industry, making the price of a price of oil a critical benchmark in its budget calculations. Budget 2019 forecast the price of a barrel of West Texas Intermediate at $58 US for 2020-21. Over the last month, the price has hovered between $49 and $53 a barrel.

Rachel Notley, leader of the NDP Official Opposition, said the lower price of oil, along with dampened projections for economic growth and job creation, will translate into less revenue for the province. 

“We’re either going to see the deficit grow, the balance day delayed, or more cuts, or Albertans paying more out of pocket,” she said about Thursday’s budget. “All in all, Jason Kenney’s plan is failing.”

Alberta Premier Jason Kenney, reacting at a news conference in Edmonton Monday to the bombshell news that Teck Resources was withdrawing its application for a $20-billion oilsands mine in northern Alberta. Kenney said his government believes in free market solutions, but would look at ways to directly invest in the energy sector due to ‘existential threats.’ (Jason Franson/The Canadian Press)

Alberta was forecast to end its 2019-20 fiscal year with an $8.7 billion deficit. Finance Minster Travis Toews said on Wednesday that his government will continue on the same path it started in the October budget with an aim of returning to surpluses by 2022-23. 

To make that point, he wore the same cowboy boots he wore for his pre-budget availability in October. 

“I’m wearing these boots again because the work continues,” Toews told reporters who gathered in his legislature office.  “There continues to be heavy lifting in front of us as a province but I will say this. We are on track.”

The focus of the budget will be on job creation, Toews said. The government intends to release what it calls the Blueprint for Jobs. 

Education funding formula 

The throne speech Tuesday signalled the government’s vow to reduce spending by less than three per cent. Budgets for Health, Education, Community and Social Services and Children’s Services will be “maintained at or increased to record high levels.” 

But that statement is where the government finds itself at loggerheads with the Opposition NDP and the workers who deliver frontline services. 

They argue maintaining the same level of funding equals a cut in a province with a growing population and increasing cost of living. 

Government ministers have vehemently denied this is the case. 

The Alberta Teachers’ Association recently received government documents under a freedom of information request that showed school boards lost $136 million in funding in this school year. In question period Wednesday, Education Minster Adriana LaGrange refused to acknowledge these figures, stating that the government has “maintained record spending in education.”

Trisha Estabrooks, chair of the Edmonton Public School Board, says her district received $34.4 million less this year and has depleted its surplus. 

Estabrooks says she is anxious about what Thursday’s budget will hold. 

“We are concerned that our classrooms will look different next year,” she said last week. “You can’t cut from our education budget and not expect it to affect the classrooms.”

Last week, LaGrange released a new education funding formula which will fund schools on a three-year moving average. Urban districts with rapidly growing student populations say this change means their districts will always fall behind. School boards were told the actual numbers wouldn’t come until budget day. 

Public service

The public service is bracing for additional cuts. Last month, an independent arbitrator awarded a one per cent increase to Alberta government workers and general support health-care staff represented by the Alberta Union of Provincial Employees. 

At the time, Toews speculated about the “potential for adjustments to workforce levels” as he claimed there was no additional money for salary increases. 

UNA and AUPE members protested possible health care cuts and privatization at rallies across Alberta on Feb. 13, including this rally outside the Royal Alexandra Hospital in Edmonton. (Trevor Wilson/CBC)

On Wednesday, he said the government is continuing its plan to reduce the civil service by seven per cent over four years. 

“Obviously department managers are taking a look at how they are going to be able to meet budget,” he said. “Individual decisions will be made at each department in order to achieve budget.” 

Health care

The budget comes as the government is engaged in a fierce battle with Alberta physicians over compensation. Last week, Health Minister Tyler Shandro announced his government was ending its agreement with doctors and imposing changes after a breakdown in talks with the Alberta Medical Association.

The government is also negotiating new contracts with most of its major public-sector unions including the United Nurses of Alberta.

UNA president Heather Smith is worried about what the budget could mean for health care. She says the system currently doesn’t have enough capacity. 

“We already have huge concerns about the safety of our patients and the safety of nurses and other health care workers here in the province,” she said. “The thought that they will get even worse is driving many people away.”

The budget is expected to be tabled around 3 p.m. Thursday. 

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