HOW THE RED-INK TIDE WILL RISE

For the first time in two decades, new debt will pay for government operations

Alberta’s debt will swell to $36.6 billion by 2018 as the province attempts to stimulate the economy and put thousands of Albertans to work with an “ambitious” infrastructure binge.

Included in that figure is borrowing for capital, to build such things as roads, schools, hospitals and bridges, but it also includes for the first time in more than two decades new debt to pay for government operations.

The budget’s five-year outlook projects total debt could rise as high as $47 billion in 2019, but by then new revenue measures could offset that total.

The Journal takes a look at Alberta’s debt plans over the next five years.

OPERATIONAL DEBT

In 2016-17, the province will borrow $712 million to pay public employees such as nurses and teachers, and finance government programs.

By 2017-18 that figure will swell to $3.1 billion, but Finance Minister Joe Ceci defended the move as necessary to protect public services.

“We’re going to assure Albertans that we have their best interest at heart and we’re not going to fire thousands of people to assuage some people in other parties,” he told reporters.

Alberta hasn’t borrowed money to pay for operations since 1993.

DEBT FOR BUILDINGS, ROADS

Alberta is set to take on $5.9 billion in new debt for capital projects this year, bringing accumulated infrastructure debt to $18 billion.

The province will borrow an additional $6.7 billion for capital projects in 2016-17 and $6.8 billion the year after that. By 201718, capital debt is forecast to hit $31.7 billion.

Overall, Alberta is hiking infrastructure spending by 15 per cent over the proposed March budget, for a total of $34 billion over the next five years.

SAVINGS DWINDLING

The Alberta government has reached its hand into the province’s rainy-day fund as plunging resource royalties punch a massive hole in the budget.

This year, the province will withdraw $3.3 billion from the Contingency Account, leaving it empty until 2019, when it plans to deposit $400 million.

At the same time, the province will leave the Alberta Heritage Savings Trust Fund untouched, only making annual deposits to match inflation.

“We keep the principal in the Heritage Savings Trust Fund for the future generations and the future growth of this province, so that was not on the table ever,” Ceci said.

“I think this is the best way to go forward.”