Alberta Premier Jason Kenney speaks during a news conference in Edmonton on Feb. 24, 2020. It’s budget day in the province, and Kenney’s United Conservative government is promising more help in the fight against COVID, but more red ink on the bottom line. THE CANADIAN PRESS/Jason Franson

Alberta Premier Jason Kenney speaks during a news conference in Edmonton on Feb. 24, 2020. It’s budget day in the province, and Kenney’s United Conservative government is promising more help in the fight against COVID, but more red ink on the bottom line. THE CANADIAN PRESS/Jason Franson

Alberta’s budget promises more help for COVID-19 with a hard deficit

Annual spending on debt interest is closing in on $3 billion

Alberta’s COVID-19-era budget made a hard landing Thursday with an $18.2-billion deficit but also a promise that good times will return.

Finance Minister Travis Toews said a continued vaccine rollout and more businesses opening up should put Alberta on track to start its rebound in the back half of this year.

“Alberta’s economy is now expected to reach pre-COVID levels by 2022, one year earlier than expected,” Toews told a news conference prior to introducing the 2021-22 budget in the legislature.

“(But) Albertans continue to face one of the most difficult times in our history. We’re ensuring that we’re resourcing our health-care response adequately to meet the pandemic challenge (and) we’re positioning the economy for growth and a rebound.”

For now, the eye-popping deficits continue — $20.2 billion for the fiscal year ending March 31 and $18.2 billion forecast for the coming fiscal year.

Toews and Premier Jason Kenney have called Alberta’s economic bludgeoning a rare “triple black swan” caused by the pandemic, the resulting global recession and an oil-price war that further depressed prices.

The medium-term outlook is for more red ink. Alberta is on track to carry $98 billion in tax-supported debt this year, rising to more than $132 billion by 2024. The province’s debt a decade ago was $5.1 billion.

Annual spending on debt interest is closing in on $3 billion.

The budget delivered on promises to avoid tax increases in a province that has the lowest per-capita tax regime in Canada — and is the only one with no retail sales tax.

The fiscal plan calls for $57 billion in spending, along with a minimum $1.1 billion to fight COVID-19 and another $1.8 billion in pandemic spending if needed. That’s on top of $5.8 billion in COVID-19 spending last year.

The health budget is to rise by about $1 billion to $21.4 billion.

Opposition Leader Rachel Notley said the budget fails on multiple fronts.

“It’s a little bit of a deer in the headlights budget. It’s like they didn’t know what to do.”

The NDP leader said much of Kenney’s “so-called economic recovery plan” has no overarching strategy and consists of reannouncements of old policies or money from the federal government.

“(The plan) amounts to a couple hundred million dollars at best. This, out of a budget that includes almost $40 billion in expenses.”

Notley suggested the budget continues to undermine services across the board — either through direct reductions or by failing to fund for population growth and inflation.

“Albertans will pay for Jason Kenney’s mistakes in many, many ways but ultimately the greatest cost is going to be that of lost opportunity.”

Non-renewable resource revenues, the traditional foundation of Alberta’s economy, are expected to bring in $2.9 billion, about half of what they were before the pandemic.

Oil prices have rebounded in recent weeks to above US$60 a barrel for the benchmark West Texas Intermediate, but Toews said the province can’t count on or budget for renewed boom times.

“We’re focused on what we can manage … and we’re looking to ensure that we’re delivering government services most efficiently.”

Toews said the United Conservative government remains committed to reducing public-sector, per-capita spending to match that in comparable provinces such as British Columbia and Ontario.

Indicators suggest the overall fiscal future, while not rosy, is brighter. Real gross domestic product, or GDP, is expected to rise 4.8 per cent this year after a 7.8 per cent decline in 2020.

Alberta’s unemployment rate, estimated at 11.4 per cent last year, is expected to slowly decline to 7.3 per cent by 2023, close to its pre-pandemic level.

University of Calgary economist Trevor Tombe said the budget continues “kicking the can down the road” in terms of hard decisions to find revenue to get the books back into balance.

He said even with the reduced spending as planned by 2022, the government will need to find billions of dollars of new money.

But he noted the budget’s most optimistic scenario — West Texas Intermediate oil averaging US $64.50 a barrel by 2023 — could reduce the deficit to as little as $3.4 billion and give the government a chance to balance the books while avoiding dreaded tax hikes in an election year.

“They’ve got to be hoping that oil prices rise and spare them those tough decisions,” said Tombe.

“This is in the grand tradition of Alberta governments for decades.”

Dean Bennett, The Canadian Press

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Nineteen-year-old Amanda enjoys a ride during a visit to Spirit’s Respite Ranch near Stettler. photo submitted
Busy days at Spirit’s Respite Ranch near Stettler

The ranch, which launched operations last summer, provides support through animal interaction

Alberta chief medical officer of health Dr. Deena Hinshaw said on Thursday that the province has seen its first case of the B.1.617 variant. (Photography by Chris Schwarz/Government of Alberta)
Red Deer nears record number of active COVID-19 cases

Alberta reports 1,857 new cases of COVID-19, 1,326 new variants

People line up outside an immunization clinic to get their Oxford-AstraZeneca COVID-19 vaccine in Edmonton, Tuesday, April 20, 2021. THE CANADIAN PRESS/Jason Franson
Alberta passes bill to give all workers paid leave to get COVID-19 vaccine shot

Labour Minister Jason Copping says Bill 71 will reduce barriers for Alberta workers to get vaccinated

Stettler County
County of Stettler meeting highlights

County of Stettler council was presented with six separate bylaws at varying stages of progress

Alberta completed 18,412 COVID-19 tests, as reported on Wednesday, for a test positivity rate of 9.5 per cent. (NIAID-RML via AP)
Highest daily count of 2021 so far: Alberta reports 1,699 COVID-19 cases

Variants now make up 59 per cent of Alberta’s active cases

Canadian Prime Minister Justin Trudeau and United States President Joe Biden smile as they say farewell following a virtual joint statement in Ottawa, Tuesday, February 23, 2021. THE CANADIAN PRESS/Adrian Wyld
Trudeau pledges to cut emissions by 40% to 45% by 2030, short of U.S. goal

Trudeau announced target during a virtual climate summit convened by U.S. President Joe Biden

A health care worker prepares to test a Coastal GasLink field worker for COVID-19. (Coastal GasLink photo)
Alberta bill would protect health workers, care homes from some COVID-19 lawsuits

The bill proposes exempting a range of workers, including doctors, pharmacists and care-home operators, from being sued over COVID-19 unless it was for gross negligence

Journal de Montreal is seen in Montreal, on Thursday, April 22, 2021. The daily newspaper uses a file picture of Prime Minister Justin Trudeau dressed in traditional Indian clothing during his trip to India to illustrate a story on the Indian variant of the coronavirus. Paul Chiasson/The Canadian Press
Montreal newspaper blasted for front-page photo of Trudeau in India

Trudeau is wearing traditional Indian clothes and holding his hands together in prayer beside a caption that reads, ‘The Indian variant has arrived’

Education Minister Adriana LaGrange was in Red Deer on Friday to provide an update on the province's COVID-19 response in schools.
Photo by PAUL COWLEY/Advocate staff
Alberta government aiming to boost financial literacy among students

Government providing grants to organizations who will help design financial literacy programming

President Joe Biden holds a virtual bilateral meeting with Canadian Prime Minister Justin Trudeau. (AP Photo/Evan Vucci)
U.S. to help Canada with more COVID-19 vaccine supply, Biden says

The U.S. has already provided Canada with about 1.5 million doses of the AstraZeneca vaccine

In this image from video, former Minneapolis police Officer Derek Chauvin, center, is taken into custody as his attorney, Eric Nelson, left, looks on, after the verdicts were read at Chauvin’s trial for the 2020 death of George Floyd, Tuesday, April 20, 2021, at the Hennepin County Courthouse in Minneapolis, Minn. THE CANADIAN PRESS/Court TV via AP, Pool
George Floyd’s death was ‘wake-up call’ about systemic racism: Trudeau

Derek Chauvin was found guilty Tuesday on all three charges against him

FILE - Dan Smyers, left, and Shay Mooney from the band Dan + Shay perform on NBC's Today show in New York on June 28, 2019. The duo will perform at Sunday's Academy of Country Music Awards. (Photo by Charles Sykes/Invision/AP, File)
Luke Bryan wins top ACM Award, but female acts own the night

Luke Bryan wins top ACM Award, but female acts own the night

In this undated photo provided by John-Paul Hodnett are a row of teeth on the lower jaw of a 300-million-year-old shark species named this week following a nearly complete skeleton of the species in 2013 in New Mexico. Discoverer Hodnett says it was the short, squat teeth that first alerted him to the possibility that the specimen initially dubbed "Godzilla Shark" could be a species distinct from it's ancient cousins, which have longer, more spear-like teeth. The image was taken using angled light techniques that reveal fossil features underneath sediment. (John-Paul Hodnett via AP)
‘Godzilla’ shark discovered in New Mexico gets formal name

The ancient chompers looked less like the spear-like rows of teeth of related species

Most Read