The Alberta government recently tabled its 2016-17 budget, the Alberta Jobs Plan.\u00a0 Here are 10 things to know about it.<\/p>\n
1. A new carbon tax (known as a \u201ccarbon levy\u201d) was announced.<\/strong>\u00a0<\/strong>As a result, in 2017, Albertans will pay an extra 4.5 cents per litre of gasoline and 5.35 cents for each litre of diesel. The following year, it will increase to 6.7 cents per litre of gas, and eight cents for diesel.\u00a0 This new tax is predicted to raise $9.6B over the next five years.\u00a0 Once fully phased in, it is expected to generate $1.7B in annual revenue.\u00a0 I suspect the Alberta government was being strategic about when they introduced the levy.\u00a0 Indeed, as\u00a0Thomas Walkom recently argued<\/a>: \u201cPolitically, it is easier to raise energy prices when they are low.\u201d<\/p>\n 2. Two-thirds of the revenue generated from the carbon tax will finance climate-related initiatives.<\/strong>\u00a0<\/strong>These will include initiatives related to\u00a0\u201c<\/strong>green infrastructure, energy efficiency, renewables, and innovation and technology<\/strong><\/a>.\u201d<\/strong>\u00a0<\/strong>Most of the remaining amount will be transferred as rebates to lower-income households\u2014that is, individuals earning less than $47,500\/yr. and families earning less than $95,000\/yr. (For more on the carbon tax,\u00a0see this Marc Lee blog post<\/a>.)<\/p>\n 3. A major feature of the budget is the new<\/strong>\u00a0<\/strong>Alberta Child Benefit<\/strong><\/a>.<\/strong>\u00a0<\/strong>This will be a non-taxable benefit geared towards lower-income parents. Some households will be eligible to receive up to $2,750\/yr.\u00a0 To qualify, a household\u2019s annual income must be below $41,220.\u00a0 Households receiving social assistance\u00a0will<\/em>\u00a0be eligible.\u00a0\u00a0 The Alberta government estimates that this will affect 235,000 children in 130,000 families. To qualify, recipient households must simply file their taxes.\u00a0 For the current fiscal year, the Alberta Child Benefit will cost $147M; the following year, it will cost $196M.<\/p>\n 4. The days of six per cent year-over-year growth of health spending may be over.<\/strong>\u00a0<\/strong>Nationally, inflation-adjusted health spending increased steadily from the mid-1970s until 2010 (during that time, the hospital share of health spending decreased substantially, while the drug share rose). But in 2010, inflation-adjusted health spending across Canada started to plateau (see the line graph\u00a0on p. 6 of this report<\/a>).\u00a0 In announcing in this budget that health will see a three per cent increase in 2016-17\u2014and that future years will see an increase of just 2.5%\u2014the Notley government appears to be mirroring this national trend.\u00a0 When one factors in inflation and population aging, this appears to be a signal to health administrators to do more with less.<\/p>\n 5. On an annual basis, provincial spending on housing will nearly double.<\/strong>\u00a0<\/strong>The Alberta government announced $892M in new funding for housing, over five years. Much of this will pay for operating costs of already-existing housing.\u00a0 Some providers of affordable housing will get capital money to purchase new units.\u00a0 To put that into perspective, annual provincial spending on housing in 2015-16 was $177M (budgeted).\u00a0 Annual provincial spending on housing for 2016-17 is budgeted at $325M.\u00a0 This is all provincial funding and does not factor in federal funding for housing capital expected in light of this year\u2019s federal budget.<\/p>\n 6. The homelessness sector saw a 2% increase in funding.<\/strong>\u00a0Specifically, Alberta\u2019s homeless-serving sector saw a $3.4M one-time increase (meaning that\u00a0Homeless and Outreach Supports Services\u00a0has an annual budget for this fiscal year of $181.4M). Keeping in mind that inflation in Alberta was\u00a01.5% in the past year<\/a>, this is a modest increase.<\/p>\n 7. Many social assistance recipients will see a decrease in the<\/strong>\u00a0<\/strong>real value<\/strong><\/a>\u00a0<\/strong>of their benefits.<\/strong>\u00a0<\/strong>There will be no increases in benefit levels for social assistance recipients\u2014for example, a \u2018single employable\u2019 adult on welfare will continue to receive approximately $8,000 annually to live on (see Figure 9a in this report<\/a>). Benefits are not indexed to inflation, ergo, if inflation is 1.5% in the year ahead, the\u00a0purchasing power<\/a>\u00a0of social assistance benefits will decrease by 1.5%.<\/p>\n 8. Alberta remains the only Canadian province without a sales tax.<\/strong>\u00a0<\/strong>Alberta still has no provincial sales tax<\/a>; and on April 18, Alberta\u2019s finance minister\u00a0reassured a Calgary audience<\/a>\u00a0that there is no immediate plan to change this. Yet,\u00a0in a recent opinion piece<\/a>, Jack Mintz advocated in favour of Alberta finally bringing in its own\u00a0Harmonized Sales Tax<\/a>. (Note:\u00a0last fall, the provincial government\u00a0increased both personal and corporate tax rates<\/a>.)<\/p>\n 9. Alberta\u2019s debt-to-GDP ratio remains the lowest in Canada.\u00a0<\/strong>As David Dodge pointed out last fall<\/a>, \u201cuntil the end of 2014-15 Alberta was unique among the four largest provinces in having a net financial asset (NFA) position rather than a net debt.\u201d By contrast, British Columbia\u2019s net debt represented 16% of its GDP, while Ontario\u2019s net debt represented almost 40% of its GDP. This led Dodge to conclude that \u201cAlberta has prudent room for net borrowing before its debt\/GDP reaches even the relatively low ratio of British Columbia.\u201d\u00a0 Or, in the words of Alberta\u2019s finance minister, Alberta still has the \u201cbest balance sheet of any province in the country<\/a>.\u201d\u00a0\u00a0As of April this year<\/a>, Alberta still had the lowest net debt-to-GDP ratio of any Canadian province (and by a considerable margin).\u00a0 That\u2019s the \u2018good news\u2019 for Albertans.\u00a0 The \u2018bad news\u2019 is that\u00a0credit rating agencies<\/a>\u00a0have\u00a0recently\u00a0downgraded Alberta\u2019s credit rating<\/a>.<\/p>\n 10. More details on the budget will be released over the next several weeks.<\/strong>\u00a0<\/strong>With the budget bill having been tabled in the legislature, there will be hearings during the month of May, during which time members of the Alberta legislature will ask questions (including during Question Period). Once each department has been heard in front of Members of the Legislative Assembly, a formal vote will take place on the entire budget.\u00a0 May 17 is when that big vote (called the Main Estimates Vote) takes place.\u00a0 From now until May 17, some of the details behind budget items will therefore be revealed.\u00a0 This process will help inform Albertans where the provincial government is headed in the next several months.<\/p>\n This blog post originally appeared on the website of the Calgary Homeless Foundation.\u00a0 I wish to thank the following individuals for assistance with this blog post:\u00a0 Regan Boychuk, Herb Emery, Jason Ennis, Louise Gallagher, Darcy Halber, Ron Kneebone, Diana Krecsy, Lloyd Mason and Kelsey Shea.\u00a0 Any errors are<\/em><\/p>\n <\/p>\n Do you have something to say about the article you just read? Be part of the<\/em>\u00a0<\/em>Policy Options\u00a0<\/em>discussion, and send in your own submission. Here is a<\/em>\u00a0<\/em>link<\/em><\/a>\u00a0<\/em>on how to do it. |\u00a0Souhaitez-vous r\u00e9agir \u00e0 cet article ? <\/em>Joignez-vous aux d\u00e9bats d\u2019<\/em>Options politiques\u00a0<\/em>et soumettez-nous votre texte en suivant ces<\/em>\u00a0<\/em>directives<\/em><\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" The Alberta government recently tabled its 2016-17 budget, the Alberta Jobs Plan.\u00a0 Here are 10 things to know about it. 1. A new carbon tax (known as a \u201ccarbon levy\u201d) was announced.\u00a0As a result, in 2017, Albertans will pay an extra 4.5 cents per litre of gasoline and 5.35 cents for each litre of diesel. 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