Rumours swirled through the halls of the Legislative for weeks. Whispers and warnings of cuts and rollbacks not seen since Ralph Klein and Jim Dinning unleashed a scorched earth policy on the provincial budget in the mid-1990s. Back in debt. Broken promises. Bankrupt budgets.
The end was nigh.
And today, the budget was tabled and the massive cutbacks did not emerge.
The end is not nigh, but remains difficult to figure out what long-term goals Finance Minister Doug Horner and Premier Alison Redford plan to accomplish with Alberta’s 2013 provincial budget. The devil is in the details and the posturing for the next provincial election, expected in 2016, has already begun.
The Sustainability Fund that has saved our provincial government from going back into debt for five years is gone and in its place, the government is introducing the Fiscal Management Act, which Minister Horner says will mandate annual savings. In hindsight, and the world of smart fiscal management, this is probably something that the Tories should have started doing when they first formed government more than forty years ago.
Different than most years, this year’s budget is separated into three categories – operating, capital, and savings. This helps the government deflect criticism that it has returned to capital financing in order to build much needed public infrastructure and poses roadblocks to opposition groups hoping to make straight comparisons to previous budgets. The split also allows government ministers to argue with the deficit-hawks in the Wildrose official opposition that the “real” deficit, in the operating budget, is only projected to be $2 billion.
Overall, the budget for 2013-2014 is projected to stay the same as last year’s provincial budget, though the funding within the $36 billion has shifted. Cuts have been made.
The largest slice of the budget, going Alberta Health Services budget was increased by 3%, rather than the promised 4.5%. AHS Chairman Stephen Lockwood, the trucking magnate from Okotoks, weeks ago publicly declared that he would not fight for the full promised increase.
The Municipal Sustainability Initiative grants awarded to cities, towns, and counties have been frozen at $846 million, the rate in last year’s budget. This may feel problematic for some municipalities, who have already borrowed funds based on expected MSI funding in order to finance critical infrastructure projects. Alberta’s municipalities are responsible for so much of the critical infrastructure and services Albertans interact with daily.
The Alberta Association of Municipal Districts and Counties, known to political insiders as the “Tory farm team” because past rural Tory MLAs who have emerged from its ranks, expressed its disappointment in the cuts to municipal funding programs.
“Rural municipalities are responsible for the roads that keep our economy moving and the government’s lack of support for this critical responsibility will have a huge impact on our members’ budgets,” said AAMDC President Bob Barss.
The Advanced Education budget was cut by 6.8%, creating a likely situation that will see Universities and colleges turn to raising tuition and non-instructional fees levied on students to fill their financial gaps. University of Alberta President Indira Samarasekera sent a mass-email to staff and students earlier this week warning them that changes are on their way.
Calling the post-secondary cuts the largest in two decades, Council of Alberta University Students chair Raphael Jacob said “these cuts are going to have an immediate impact on the quality of our post-secondary education, and potentially longer impacts on the affordability and accessibility of degrees in Alberta.”
The budget also leaves unresolved a number of outstanding political issues facing Premier Redford’s government, such as the two ongoing labour disputes with Alberta teachers and doctors. These fights remain unresolved as the budget included a one year wage freeze for all public employees, including remuneration for doctors. The wage freeze should not be an issue for the teachers, who proposed a deal for two years without wage increases, but the doctors may move to escalate their dispute.
There will be no shortage of commentary on the political implications of this year’s provincial budget, but it is the long-game that matters. This budget is the first of a potential four before the Tories are expected call the next election in 2016. Whether they hope the Fiscal Management Act will earn them dividends from voters or that revenue from an increased price of oil will once again overflow government coffers, we are just in the first year of a four-year long political game.
