Alberta set to spend its way out of recession

The NDP's first budget will be tabled on Oct. 27th, but spending plans have been leaking out for weeks now

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RED DEER, AB Oct 16, 2015/ Troy Media/ – Alberta Finance Minister Joe Ceci seems anxious to deliver his first budget well ahead of the Oct. 27th due date.

So anxious that he and other members of the New Democratic caucus started to reveal spending plans weeks before the actual delivery date. Other details of the new Alberta economic framework have been dribbling out for months.

It is clear that infrastructure is at the top of the list. Ceci has said as much, linking employment to infrastructure spending.

“Our budget will outline a plan for jobs and economic growth while stabilizing public services and putting us on a path to balance,” Ceci said this month.

On the services front, money has begun to move: $10 million in additional Family and Community Support Services funding has been promised to municipalities, which direct the actual spending.

Municipalities are waiting for much more. The deficit in new infrastructure, and the disrepair in existing infrastructure, has festered for years. Municipalities have been waiting since the government was elected in the spring to discover what an NDP administration will do to heal the festering infrastructure wound.

And now the money has started to flow.

In Red Deer, $9.5 million in airport upgrades have been announced with $6 million coming from the province. (The federal government rejected an application for $3 million from its Small Communities Fund in July. Red Deer is seen as a very secure Conservative riding and spending money in the constituency so close to an election likely seemed to be politically unnecessary.)

In Edmonton, a projected $4.5-billion, 16-year renovation of the Royal Alexandra Hospital is being discussed.

And Premier Rachel Notley recently told the Alberta Urban Municipalities Association that propping up a weakened economy through infrastructure spending makes sense. “This is a time when there may be some capacity available in our construction industry, and when capital is relatively inexpensive – in moderation.” she said.

But, what is moderation? How aggressive are the spending plans? There are some big unknowns.

A continued government role in the bitumen refinery under construction near Redwater is up in the air. The government is committed to the first phase of the project, through an agreement signed by the Conservatives. How the next phases of this project, designed to add value to oil sands crude, will be funded is unclear.

Across the province, there is uncertainty about the fate of many of the 190 school projects promised by the Conservative governments of Jim Prentice and Alison Redford. Education Minister David Eggen has said that as many as 70 per cent of those projects are more than a year behind and he has asked the province’s auditor general to find out why.

Albertans want the projects back on track and completed. And they want to know how these and other projects will be funded.

Will the money come from increased royalties? Alberta Energy Minister Marg McCuaig-Boyd recently told Alberta Oil magazine the current royalty review may not result in any increases.

A more equitable tax system is certainly part of the equation.

In the spring, Ceci introduced a corporate tax increase of two percentage points. He also announced that Albertans earning more than $300,000 a year would pay 50 per cent more in tax, and that the flat tax system would be replaced with five tax brackets.

With increased taxes, there is a clear intent to spend our way out of recession. But how much will the planned spending cost each and every one of us?

Ceci is undoubtedly waiting for the due date before delivering that bad news.

John Stewart is former managing editor of the Red Deer Advocate. To book John click here.

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