Health care and education come out ahead in restrained Alberta budget

EDMONTON — Health care and education came out ahead Thursday in a generally restrained Alberta provincial budget forecasting a paper-thin surplus that could easily go up in smoke.

“It is a solid budget based on measured choices,” Finance Minister Nate Horner told reporters.

Horner followed instructions from Premier Danielle Smith in delivering the 2024-25 budget, keeping spending increases below 6.2 per cent, a figure derived from the province’s rate of inflation and population growth.

That has led to a total spending forecast of $73.2 billion, a 3.9 per cent increase from last year.

Horner expects a surplus of $367 million.

However, the $2 billion the government has reserved for contingencies such as drought and wildfire is about a third less than what was actually spent last year on those disasters. The province is expecting another dry and hot summer.

“We know we’re starting out in a rough spot,” Horner said.

“You could make [a contingency fund] as high as you want, but you do need it to be realistic.”

As well, resource revenues are expected to make up nearly a quarter of provincial revenues through 2026.

Each dollar drop in the benchmark price of oil costs Alberta more than $600 million.

The government has forecast the price of West Texas Intermediate crude to average $74 US per barrel. On Thursday, the U.S. oil benchmark was above $78 US per barrel.

The $1.1-billion increase in health-care spending will largely go to public health, doctors’ pay and acute care. The costs of the government’s previously announced health-care restructuring are expected to be another $70 million this year, although officials suggest those costs will be recouped through efficiencies.

The budget contains no funds for a long-promised hospital in south Edmonton.

There is $20 million over three years to plan for a standalone children’s hospital in the provincial capital, but no timeline for construction to begin.

Spending on mental health and addiction is forecast to decrease slightly in 2024-25, from $180 million to $171 million. However, that is expected to rise to $236 million the following year as the government moves forward on its plans for treatment centres.

Education also received a 4.4 per cent increase. Most of that will be used to hire new teachers and educational assistants.

“Budget 2024 will allow schools to hire hundreds more teachers, educational assistants and other support staff,” Horner said.