Good morning, this is Mark Iype in Edmonton and my first time writing the newsletter. I am in charge of The Globe and Mail’s regional bureaus across the country and I’ve recently taken over from James Keller as the Alberta Bureau Chief, so expect to see me regularly in this space.
It was a busy start to the week in Western Canada, with both Alberta and B.C. governments tabling their provincial budgets on Tuesday.
In Alberta, Finance Minister Travis Toews introduced a budget projecting a $2.4-billion surplus, thanks to non-renewable resource revenue forecast to hit a record $27.5-billion in 2022-23. Energy prices have soared as global demand bounced back from the pandemic and after the Russian invasion of Ukraine, pushing the overall Alberta government revenue to a record $76-billion as a result.
While the province readies itself for an election most likely to be held in May, there were a number of expected bumps in spending. The health care budget is jumping by about 4 per cent with $965-million being added – an increase that is partly offset by a top-up of the Canada Health Transfer. The K-12 education budget is getting a much smaller increase but nearly $2-billion is being put aside for the next three years as the province deals with soaring enrolment.
Probably the biggest news out of the budget was the creation of the Alberta Fund. It was touted as part of the government’s plan to create fiscal guardrails, but Mr. Toews was quick to point out it was not meant for election goodies.
“It’s anything but a slush fund,” he told reporters before presenting the budget in the legislature. “It was conceived to bring discipline to the use of surplus.”
While paying off maturing debt is the first priority of the fund, as Kelly Cryderman points out, Premier Danielle Smith’s UCP will, if it chooses, be able to use hundreds of millions of dollars for “one-time initiatives” as soon as the new fiscal year begins on April 1.
In British Columbia, the NDP government introduced a budget with a precipitous drop from the fortunes of the last fiscal year. In the latest fiscal update, the province indicated it was ending the 2022-2023 budget year with a $3.6-billion surplus, even after the government had spent the weeks prior to Monday’s budget announcing new spending, an effort to ensure that extra didn’t go toward paying down the debt as provincial law dictates.
On Tuesday, B.C. Finance Minister Katrine Conroy was clear that largesse won’t be repeated. She introduced a budget with a $4.2-billion deficit, with deficits predicted in each of the next two years of the three-year plan. She deflected a question about when the province’s books might be in balance.
“I won’t say we don’t care about deficits,” she told reporters, but she defended the spending-heavy plan. “It’s not the right time to make cuts.”
The budget repeated the NDP’s previously announced injections of extra money into health care, including $270-million over three years for improved cancer care. But the fine print of the budget documents show health spending as a proportion of the province’s overall operating expenses has actually decreased since 2016, just before the start of the NDP mandate. It was about 40 per cent then and for the next fiscal year, it will amount to 38 per cent.
As Justine Hunter writes, health care spending will rise to $28.7-billion, which will help pay for more supports for cancer care and new treatment beds for those with mental-health challenges and addictions. There is additional money to help fund a new compensation model for family doctors that has already been established.
The budget includes roughly $600-million in additional health transfers from the federal government, as part of the top-up of the Canada Health Transfer announced in February to address immediate pressures, including pediatric hospitals and emergency rooms, and long waiting times for surgery.
Aside from the major investments previously announced in housing and health care, the winners from the 2023 budget include the public sector, where wages are expected to rise by $4.3-billion next year and the public sector expects to hire 600 more workers. People on income and disability assistance will see a $125-per-month increase to their shelter rate. Low-income families who rent will be eligible for up to $400 per year in rebates and there will be an increase in the monthly BC Family Benefit. A low-income four-person family will also be eligible to up to $900 – from $500 – in carbon tax rebates. B.C. is also becoming the first Canadian jurisdiction to make prescription contraception free.
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief Mark Iype. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.
Wendy Cox