Government website hints at possible cuts
Premier Alison Redford didn’t say Monday night how she plans to address a $6-billion hole in her March budget, but an online tool soon to be unveiled on an Alberta government website may provide some clues.
During a telephone town hall meeting with 5,000 Progressive Conservative members, the premier didn’t completely slam the door on tax increases, the resurrection of health-care premiums or the creation of a sales tax at some time in the future.
“I think there’s a place for that conversation, but what we don’t want to do is to start coming up, frankly, with immediate reactions to some of the issues that we need to deal with in a way that doesn’t take into account what Albertans are thinking,” she said.
“It has been really interesting to me to hear how many people talked about what some of these options could be. And the only thing that I ask and could say on behalf of government is before we start talking about these issues, we want to make sure that Albertans have confidence that we’ve done absolutely everything that we can in government to be prudent and responsible and accountable with taxpayers’ dollars.”
A provincial government website to be unveiled in the next few days sets out specific examples of what could be done and what revenues and savings would result.
The site will be accessible at www.budgetdecision.ca.
The website notes that increasing the flat tax to 11 per cent from 10 per cent would generate $930 million, while introducing a second tax rate on income over $250,000 — boosting it to 14 per cent — would generate $1.2 billion.
Introducing a two per cent sales tax would bring in $2.4 billion, while a five per cent sales tax would generate a whopping $6 billion.
“Higher-income Albertans will shoulder the burden of a provincial sales tax in real terms,” the website document says. “However, a sales tax would have a greater effect on low-income Albertans and seniors, who would pay a larger per cent of their income on goods and services.”
While the premier’s office said Monday the budget primer discovered by the Herald is only an educational tool to illustrate to Albertans the tough choices her government will have to make, it suggests specific cuts to specific programs.
Premier’s spokesman Stephan Baranski said the numbers are drawn from the 2012-13 budget — not the one coming March 7 — and will have no bearing on the budget that is announced.
“This is not meant to predict what the government is going to do,” he insisted. “It’s just a simulation exercise. It’s to give Albertans a look at what goes into balancing budgets.”
The site advises Albertans about the province’s current fiscal crisis, pointing out the growing gap between the price of West Texas Intermediate oil and the price Alberta companies get for Western Canada Select, which reflects heavy oils and bitumen.
Albertans are given projected revenues of $39.3 billion and expenses of $42 billion and are invited to address the $2.7-billion shortfall by choosing from suggested cuts to various programs or changes to the tax regime.
It notes that bringing back health-care premiums, which were abolished in 2008, could bring in $1 billion to $2 billion.
Eliminating funding set aside for all-day kindergarten would save $50 million, eliminating the Alberta Initiative for School Improvement, designed to improve student learning, would save $40 million. Cutting basic education grants by one per cent would save $112 million and cutting funding for school board administration costs would save $23 million.
Eliminating future funding for carbon capture and storage would save $60 million, while eliminating bioenergy initiatives would save $65 million.
With health-care costs consuming nearly $16 billion annually, the website notes that bringing Alberta per capita costs down to the national average of $61.71 would save $240 million, while a 0.4 per cent cut to health spending would save about $65 million. Requiring higher income seniors to pay a portion of the costs for home care could save $140 million.
Cutting services for families with children with disabilities would save $50 million, limiting the number of new recipients of the Assured Income for the Severely Handicapped (AISH) would save $45 million.
Decreasing the seniors benefit by three per cent would save $10.5 million, reducing the funding for Aids For Daily Living by five per cent would save more than $6.7 million, and cutting school property tax assistance for seniors would save a further $2 million.
The province could save nearly $60 million with a five percent cut to the basic municipal transportation grant, a 10 per cent cut to its water-for-life strategy and a three percent cut to highway maintenance.
In the Justice Department, Alberta could save $21 million by cutting correctional services spending by 10 per cent and another $6 million by deferring the opening by one year of a section of the Edmonton Remand Centre. Freezing judges’ salaries at 2012 levels would save $21 million, while cutting the Safe Communities Fund by 50 per cent would save $7 million. Eliminating funds to operate buildings built under the Municipal Sustainability Initiative could save $50 million, while cuts to grants made to municipalities in lieu of taxes would save $7 million.