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Tuesday, February 09, 2010

alberta budget 2010: striking a balance?

Alberta's 2010 provincial budget, set to be released in 2 hours, is already making headlines. While Finance Minister Ted Morton has framed it as a "give up a little" budget, an Edmonton blogger almost caught a sneak peak of the budget documents:

Low security gives blogger sneak peek at Alberta budget website (see Mack's blog for more).

Alberta Budget 2010 (updated at 9:50 p.m.)

For the second year in a row, Premier Ed Stelmach's government will run a budget deficit, this time estimated at $4.7 billion and total spending is estimated to be a record $38.7 billion. The PCs are counting on increased oilsands production to boost them out of the cycle of deficits before the 2012 election (I am sure they hope it will boost their party in the polls as well). Compared to the intense cut throat budget that many Albertans expected, this budget dealt a mixture of increases and decreases across the government. Overall, fourteen departments will be on the bitter end of cuts and eight departments will be seeing increases to their budgets in 2010.

Ted Morton Budget 2010Mayor Stephen Mandel & Minister Doug Horner Budget 2010

With a 17% increase to its operating budget, Alberta's health care system is the biggest beneficiary of this budget. Alberta Health Services will also receive a one-time infusion of $759 million for debt repayment (perhaps to the Royal Bank…). Since the 2008 election, health care has been one of the toughest files for the PCs, who have felt public pressure from across the province after the dissolution of the regional health authorities and bottom-line based system reforms. If replacing the blunt and controversial Minister Ron Liepert with the more gentler Minister Gene Zwozdesky was a first major step in the government's health care public relations shift, this budget increase and debt repayment could be the second most substantial. The challenge will be to turn these budget increases into positive changes on the ground level.

The Municipal Affairs and Infrastructure budgets were also substantially increased, due to what I imagine to be the result of strong lobbying efforts by the AUMA and AAMDC.

Perhaps a statement on the level of political capital that Culture & Community Spirit Minister Lindsay Blackett has left after the Bill 44 controversy, that Ministry will reduce operating expenses by 15%. Among other cuts, Advanced Education & Technology will face a 6% budget decrease to program expenses after being on the better end of budget increases over the past five years. Changes to the student finance section of the Advanced Education budget include decreases to student scholarships by $3 million and grants by $51 million, and increases to student loans by (ie: increased student debt).

Individual department business plans give more detail on income and expenses across the government ministries.
Lindsay Blackett Budget 2010Mary Anne Jablonski Budget 2010

When Liberal leader David Swann criticized the budget and the PCs for not "responsibly managing the public purse," it may have sounded like a predictable opposition response, but it raises some important points about recent government budgets and the provincial government's large dependance on natural resource revenues for income. Alberta is a resource-based economy, but the budget turbulence in recent years highlights why Albertans should be concerned about the lack of economic diversification in our province.

Wildrose Alliance leader Danielle Smith (who will be releasing her party's alternative budget tomorrow) criticized the budget and Finance & Enterprise Minister Ted Morton's credentials as a true fiscal conservative, but this budget is just another step in Minister Morton's public moderation. Since the 2006 PC leadership race, Minister Morton has transformed his public image as the great right-wing fire-wall lighter to a competent and softer governor. This budget includes both cuts and increases, striking a kind of political balance. This was Minister Morton's first budget and if he is able to survive his tenure in the Finance portfolio, he could be well positioned to be the leading candidate in the next PC leadership race.


Anonymous said...

"Almost caught a peak"? All that story said is that he accessed a placeholder website that had no budget documents. How is this news? He "almost" caught a peak of something the way I "almost" got laid last night.

R. G. Harvie said...

Hey, I "almost" won the 649 last week.. somehow, however, I'm still at the office today.

Go figure :)

Anonymous said...

Actually he tried for hours to get in with a program you can download. Doesn't really matter though - this is outsourced IT at work.

Bitter IT Worker Who Just Lost Their Job

Anonymous said...

Premier Ted Morton and Finance Minister Danielle Smith. I can't wait.

Ted Morton is the man said...

Good comments, Dave. Stelmach is a lame duck. This was Ted Morton's budget and the PC backbenchers know it. They know it is a good budget.

Time Scolop said...

Dave, I'm waiting for the knee-jerk reaction to anything the PCs do that's evident on most Alberta blogs. How much longer do I have to wait?

Anonymous said...

Good overview.

Trucker said...

Ted Morton is the man. But this budget sucks.

Ted Morton didn't write this budget. It was in place before he became Minister. It's a shite budget and Ted knows it.

Morton has more political capital than any other Alberta politician right now but it is rapidly dwindling. If we dont' get to see Ted Morton write a "Ted Morton" budget next year he won't have any capital left at all.

Anonymous said...

You didn't touch on it but Service Alberta takes some of the biggest cuts in this budget. They are cutting 410 of their 1800 full time equivalents and taking a full 15% cash budget decrease as well.

The new Service Alberta model of contracting out all goverment IT work will see more and more of the website leaks/hacks, like the one we saw yesterday. It also means we will continue to see the contracted out Registries continue to be the worst in North America, with Alberta still being stop #1 for any illegals in North America who want to exploit a weak system and get a new fake identity going.

These cuts ensure that Albertans government will continue to fall behind in the digital age. Hopefully Albertans don't pay the price by having important private data exposed to nefarious sources.

Signed: Another soon-to-be-bitter IT worker who just lost their job.

Anonymous said...

PCs appear to have gambled that voters remain largely in the centre. I think they're right. Now the tough work for the WR comes... And those other parties too.

Hey, what to make of Swann's comment on the news last night about calling for an inquiry of some sort. Anybody know what he was talking about?

Anonymous said...

What I'm concerned about is the massive cuts in affordable housing by a far-right and extreme minister. What's up with that?

Alvin said...

The claim that this is a "centrist" budget reflects how right-wing the political discourse in Alberta has become. We pay on average less than half of what other Canadians pay in various provincial taxes and because the oil revenues make up for only part of the gap, we are middle of the pack on health and education services.

The budget demonstrated that the government can respond to some of the push regarding health and education. But it cut (or left at last year's funding, which is a 4 percent cut when you factor in inflation and population increases) most of the programs that deal with the poor, from social assistance to housing to programs for the disabled and for children at risk.

Unfortunately the opposition only wants to focus on waste by this government, of which there is no doubt plenty but not much more, I don't think, than in every other province. We have a long-term revenue problem. That's not a problem for Wildrose because they'll take a meat-ax to programs like Klein did. It should be a problem--and an opportunity--for the Liberals and NDP, but they are terrified of appearing to promise higher taxes for anyone or anything that looks like a redistribution of wealth, however minor. Better to tell people that a better management of government services will result in improved programs without a penny more in taxation being needed.

And who should pay higher taxes? Me, for example. In Manitoba my provincial income tax would be $7000 more than it is in Alberta. In Quebec it would be $12,000 more. My peers in Quebec and Manitoba live quite well despite the taxes. Klein's flat tax gave, as Obama puts it, 'money back to people who don't need it and weren't asking for it.'

If we raised taxes overall by 50 percent, we'd still be at 75 percent of the provincial average and have the lowest taxes in Canada. We could also have the best services and put money into economic diversification and a rainy day fund for the post-oil era.

Alvin Finkel,
Democratic Renewal Project (

Connie said...

Alvin, don't forget to add that people who actually invest in government through their taxes tend to become more involved, more aware, and more inclined to vote at election time. It's a truth around the world. People who aren't getting a virtually free ride due to resource income actually expect to have a hand in the running of their country/province/state, and governments who are primarily funded by the people tend to be governed by the source of their funding. Our government is also governed by t he source of its funding...big oil. And we are all losing out as a result.

jerrymacgp said...

I tend to agree with Mr. Finkel, at least on this point. A stable and predictable revenue stream for government could be created by bringing back a progressive income tax system in which the well-off pay a bit more. Volatile energy revenues should be banked during boom times, and used during downturns and slowdowns to invest in capital infrastructure (schools, hospitals, roads, etc.), controlling costs and creating jobs.

Anonymous said...

I don't think the right wingers will abandon their flat tax experiment anytime soon, so it's probably more realistic to look for them to, if anything, increase the rate of the flat tax. It is currently at 10% and I think they could raise it to 12.5% without causing anyone too much pain, especially if they increased the base exemption level at the same time to help those poorest among us.

alvin said...

I agree with Connie's observation about taxation and citizenship. I also agree with Anonymous that the right will not easily give up the flat tax in Alberta. But it's not exactly a popular idea that has caught fire. No other provincial government has adopted it and Stephen Harper, at least before he has a majority, will not propose it.

I agree with Anonymous that if the size of the flat tax is increased that lower-income people need to be protected. The Tories might even accept that premise. But the problem for the Tories and Wildrose is that ANY increase in a flat tax will cause resentment among middle-income earners (from about $60,000 to $120,000) that they take the hit while big earners, who can more easily absorb an increase, are not hit any harder. I think that's why the Tories have never raised the flat tax: it would become controversial if it was not so low.

The Liberals and NDP need to revive talk of progressive taxation along with talk of ending deregulation of utilities. While they got nowhere on these issues in 2001 when we lived in a Klein fantasyland, there is more polarization in thinking in the province since that time. The promise that market fundamentalism would diversify the provincial economy has been proven to be a lie.


Elizabeth said...

It's funny - some tory supporters who don't like budget are saying 'it's not Morton's budget' and the ones that do like it are saying 'thanks for a great budget Morton - you're the best and Ed sucks'!

Green Party supporter said...

The Green Party wouldn't waste time putting out a budget, because budgets use paper and kill tree's.

You capitalist Neo-cons and Eco killers can keep your stinking budget to yourselves. Us Greenies have no need for money or your economy man...

Green Utopia Forever!

Anonymous said...

The DRP hasn't yet imploded due to the weight of its own futility? Amazing.

This was a crazy budget. Hard to imagine what they were thinking. Throw a ton of money at a massively mismanaged health the expense of a lot of other important initiatives. They managed to allow even the WRA to appear moderate in their slash and burn counter-budget, and further enable the Liberals' centrism and health care "management" theme.

The idea that they didn't find the $2B, and then decided not to actually cut any of what they did find and instead boost spending considerably is bizarre. Less in fiscal terms than political.

Jeff Hardy said...

hummm nice post.. you can find live india budget on internet.