Alberta’s United Conservative government is set to release the annual budget in the new legislative session, during which the party says it will usher in widespread changes to the health care system and prioritize the province’s fight against Ottawa.
Government House Leader Joseph Schow said during a press conference in Edmonton on Wednesday that the UCP plans to introduce up to 12 bills during the spring session. Providing scant details, he said the proposed legislation will broadly relate to addictions, public safety, municipal affairs and affordability.
“Alberta’s government will continue our mandate received by Alberta voters to take targeted measures to grow the economy, protecting law abiding Albertans, improve health care and defend the province from federal overreach,” Mr. Schow said. “If we continue to see federal overreach, we have the tools at our disposal to defend our best interests through the Sovereignty Act.”
The legislature reconvened Wednesday, a day before the government is scheduled to table its 2024 budget. On the first day back, MLAs debated a motion brought forward by Premier Danielle Smith to use the Alberta Sovereignty Within a United Canada Act to oppose the federal government’s proposed clean electricity regulations, which are designed to create a net-zero emissions power grid by 2035.
Nagwan Al-Guneid, the Opposition New Democratic Party’s critic for energy and climate, opposed the motion, and said the act “ignores the rule of law” and that its use will send “waves of uncertainty” to global investors. Environment Minister Rebecca Schulz said the federal initiative is an “attack on the affordability and reliability” of Alberta’s electricity grid. The motion carried.
Ahead of the budget’s release on Thursday, Ms. Smith said in a televised address last week that the province will need to “show more restraint” with economists predicting softer oil and natural-gas prices this year. Albertans will also need to wait at least a year for a personal income tax cut promised by the UCP during the general election, she said.
The Premier said she instructed Finance Minister Nate Horner to limit government spending to below the legislated rate cap of inflation plus population growth, but that spending cuts will not be necessary.
“We will ensure this is done thoughtfully and with priority given to the programs and services Albertans most rely on such as health, education and social supports,” she said in the prebudget address.
However, Trevor Tombe, an economics professor at the University of Calgary, said the Premier’s fiscal plan will strain public services, as population growth and aging Albertans drive demand. He added that Alberta’s plan to overhaul the health care system will come with a hefty price tag.
“Is that actually being accommodated in the budget? Are they going to be paying for those costs by looking for savings elsewhere in the health care system? That we don’t know,” Mr. Tombe said. He noted that postsecondary funding was targeted under former premier Jason Kenney to bring provincial spending under control.
“That will be the detail to dig into – which ministries are seeing increases and which ones are seeing decreases.”
Alberta Health Services, the provincial health authority, is already under financial constraint. There is currently a hiring freeze for management and non-clinical support positions to help manage a forecasted operating deficit, unless an exception is provided by chief executive officer Athana Mentzelopoulos. She has declined to say how much AHS is over budget, despite repeated questions from reporters.
The government plans to dismantle AHS, reducing its role to that of a hospital administrator, and create four separate organizations to oversee acute, primary, continuing and mental health and addictions care. The changes are expected to cost tens of millions of dollars and take years to implement.
The economic update last November projected a $5.5-billion surplus overall, which was more than double last February’s budget estimate. Total revenue for the 2023-24 fiscal year was expected to reach more than $74-billion and, of that, $19.7-billion was expected from non-renewable resource revenue (both higher than initial estimates).
The update also forecast that the North American benchmark West Texas Intermediate (WTI) oil price would average US$79 per barrel during the fiscal year before dipping to US$76 in 2024-25, and then US$73.50 in 2025-26. The WTI benchmark oil price sat at US$78.38 on Wednesday afternoon.
Mr. Tombe said it will be interesting to see whether the government lowballs the price per barrel in Thursday’s budget. He said doing so could reinforce the Premier’s emphasis on fiscal restraint and make it easier for the government to resist public sector pay increases in the coming bargaining cycle.
He added that the budget could be significant if it charts a long-term plan for the province, which the Premier suggested during last week’s address. He said the last time this was done in Alberta was in 2015 under former premier Jim Prentice, who outlined a 10-year plan to wean the operating budget away from royalty revenue.
“The volatile price of oil and gas often has us riding a budget roller coaster from year to year,” Ms. Smith said in the address. “It is time for our province to implement a long-term strategic financial plan that gets us to a stable balanced budget each and every year.”
Alanna Smith