Roadmap to recovery,
EDMONTON • The Alberta UPC government has released a pandemic budget meant to carry the Western province through the rest of the COVID crisis and prepare Alberta for economic recovery.
The previous provincial budget, released this time last year, came just at the start of the COVID-19 pandemic that has disrupted every facet of Canadian life. This one, after months of lockdowns, increased spending on support programs, education and health-care systems.
Finance Minister Travis Toews highlighted that the budget is a way to carry the province through the pandemic while also laying the groundwork for an economic recovery.
The province has been struggling with a major economic contraction. Much of the 2021 budget concentrates on the traditional issues facing Alberta: oil prices, market access for oil, and concerns over the amount of money flowing from Alberta to other provinces via equalization payments.
The province said it has spent $1.5 billion on healthcare expenses related to the pandemic, and the 202021 budget continues that spending, setting aside a $1.25 billion contingency fund for health care and other spending “required to beat the pandemic, such as for personal protective equipment, vaccine rollout costs or support to protect the lives of Albertans.”
More broadly, the budget allocates $2.2 billion over the next three years for health-care infrastructure projects. Renovations of hospitals and medical centres are planned, projects that double as providing healthcare services while also providing jobs.
The budget also moves in a slightly new direction, too, with a whole section devoted to how Alberta can help Canada broadly in recovering from the pandemic. While this section recycles many old themes, such as market access for oil and natural gas, it reiterates just how important these sectors are to the country and calls on the federal government to “recognize and publicly support Alberta’s energy industry.”
“With just 12 per cent of Canada’s population, Alberta attracted almost 30 per cent of capital investment in the country … on average over the past 10 years,” the budget says.
There are hints, though, of other things happening in the province, both in terms of potential future economic activity, and of a government evaluating its priorities. For example, the province is spending $20 million over four years on “research and commercialization of pharmaceutical and vaccine treatments” at the University of Alberta’s Li Ka Shing Applied Virology Institute.
Emergency budget provisions are also top of mind. The government has allocated $750 million to tackle emergencies, including wildfires and floods. This is not new money, but has been identified more clearly this budget. The money can be moved around, the budget says, to be used on “unanticipated priorities,” as necessary.
There are a number of other budget provisions that could mean a reshaping of Alberta’s cities, as well as the province’s transportation links.
The UPC government has set aside $2 million for a feasibility study on a railway and resource corridor, potentially linking Alberta and Alaska. This money will be used to inform “next steps regarding proposals for new rail lines … and related resource corridors.” The transportation links, especially, are part of a push to make Alberta a “logistics hub” for goods.
Public transit was also addressed in the budget. Some $485 million — part of previous commitments — is set aside for light rail in Edmonton and Calgary. Bridges and highways are also slated for updates and construction across the province.
Tourism is another economic priority for the Alberta government. The province plans to double tourism by 2030, spending $66 million over the next three years. Various tourism initiatives will receive direct investment, including $8.4 million to the David Thompson corridor for tourism and recreation site upgrades.
Even though this spending is well above what the United Conservatives planned for — hitting an $18-billion deficit and ballooning the overall debt to more than $115 billion — it still remains tethered to a fiscal anchor. Department officials said Alberta is one of the only Canadian jurisdictions to maintain a fiscal anchor during the pandemic, with the budget striving to keep debt-to-gdp within 30 per cent.
In that theme, the budget also reiterates the UCP government’s commitment to bringing down per-capita spending in the province and to reach a balanced budget. Even then, there are pressures. A staple of government revenue, tobacco taxes continues to provide less money “from lower consumption” — even though it still contributed $752 million into government coffers. A tax on vaping products was put on hold, the government said.
The 2021-22 budget has no new taxes or tax increases. Still, Toews insisted they were still en route to getting the province’s finances under control.
“We will continue to follow through on our commitments — so that every Albertan can feel confident as we continue to navigate through these challenging times — together,” Toews told the legislature.