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Alberta Budget 2016: NDP opts to spend big, deficit hits $10.4B

WATCH ABOVE: The Alberta NDP's budget is called the Alberta Jobs Plan, but it is awash in red ink. The deficit this year is upwards of $10.4 billion, and next year's projection is $10.1 billion. As Tom Vernon reports, the government is taking on so much new debt it's going to have to change a law passed just a few months ago.

EDMONTON – The Alberta government, with oil prices taking massive bites out of its bottom line, blew past its own spending safeguards Thursday to deliver a budget that forecasts almost $58 billion in debt within three years.

READ MORE: Reaction pours in to Alberta budget 2016

Finance Minister Joe Ceci confirmed that this year’s deficit will be $10.4 billion and said there is no expectation of balancing the books before 2024.

WATCH: Joe Ceci describes the projected $10.4B deficit.
Alberta Budget 2016: Joe Ceci on $10.4B deficit
Alberta Budget 2016: Joe Ceci on $10.4B deficit

He also outlined details of a planned carbon tax that will cost a household earning more than $100,000 annually about $500 a year by 2018.

READ MORE: Alberta Budget 2016 – How much is this carbon tax going to cost me?

There are no other new or increased taxes.

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Watch below: Ceci announces more details on the NDP’s carbon tax plan 

Alberta budget 2016: Joe Ceci on the carbon tax plan
Alberta budget 2016: Joe Ceci on the carbon tax plan

READ MORE: Winners and losers in Alberta budget 2016

Ceci told reporters before he tabled the budget that making deep cuts to a tanking oil-powered economy would only make things worse.

“We are continuing to put the pedal to the metal so that we can support Albertans through this downturn, the worst downturn in a generation,” he said.

“We’re going to come out the other side in 2017.”

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Next year’s budget deficit is forecast to be $10.1 billion and another shortfall of $8.4 billion is expected the year after that.

ALTA BUDGETARY BALANCE

READ MORE: Alberta Budget 2016 – What’s in it for Edmonton?

The last $3.8-billion of rainy-day savings in the Contingency Fund will be gone this year and Alberta will borrow $5.4 billion just for day-to-day operations.

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The $58-million debt by 2019 is a significant leap. In the NDP’s budget last fall, the plan was for a $48-billion debt, but not until 2020.

Watch below: Global Calgary expert panel dissects Alberta budget 2016

Global Calgary expert panel dissects Alberta budget 2016
Global Calgary expert panel dissects Alberta budget 2016

To legally rack up the number, Premier Rachel Notley’s government plans to rewrite a law it passed late last year that capped borrowing to a maximum 15 per cent of the province’s GDP. The cap is to be eliminated.

READ MORE: Alberta Budget 2016 -What’s in it for Calgary?

The carbon tax begins Jan. 1 and will increase the cost of gasoline by almost 4.5 cents a litre. It will also raise the cost of home heating, but not electricity. The carbon tax is to increase in 2018.

WATCH: The Alberta NDP’s budget is going to have an impact on Albertans’ bottom lines, but by how much? Laurel Gregory has more on what impact the budget will have on families.
Alberta Budget 2016: What’s the impact on families?
Alberta Budget 2016: What’s the impact on families?

The levy is expected to cost a household earning more than $100,000 annually $338 in 2017 and $508 in 2018.

A household under $51,250, or $103,000 per couple, will get rebates – plus a little bit more – of $360 next year and $540 the next.

Watch below: Global’s Emily Mertz has the highlights of Alberta budget 2016

Alberta budget 2016 highlights
Alberta budget 2016 highlights

The carbon tax is part of the government’s larger climate-change strategy to reduce Alberta’s carbon footprint and give it what it terms “social licence” to argue for increased energy infrastructure such as pipelines.

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The tax will raise an estimated $274 million in the abbreviated 2016-17 fiscal year and then rise to $1.7 billion by 2018-19.

READ MORE: Highlights from Alberta budget 2016

Notley has promised to reduce Alberta’s dependence on oil and gas revenues and the budget builds on that commitment.

There are two new tax credits worth $250 million to encourage investment in small- and medium-sized businesses and give business leaders incentives to make capital investments.

Watch below: Ceci describes the new tax credits

Alberta budget 2016: Joe Ceci on new tax credits
Alberta budget 2016: Joe Ceci on new tax credits

The small-business tax is to be cut to two per cent from three.

The overall spending increase is two per cent with small hikes in the core departments of health, education, advanced education and social services.

Watch below: Joe Ceci describes the small business tax cut

Albert budget 2016: Joe Ceci on small business tax
Albert budget 2016: Joe Ceci on small business tax

READ MORE: Alberta budget 2016 full coverage

The province is also avoiding cuts to front-line services.

“Alberta families will know we have their backs,” said Ceci.

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READ MORE: Timeline of Alberta’s economic descent toward an expected $10B deficit

Watch below: Joe Ceci on the future of energy and pipelines

Alberta budget 2016: Joe Ceci on the future of energy and pipelines
Alberta budget 2016: Joe Ceci on the future of energy and pipelines

The budget is based on West Texas Intermediate, the benchmark price for oil, averaging US $42 a barrel this year and then US$54 the year after.

The price has fallen from a high of more than US$100 a barrel in mid 2014 to under $30 in January and back again to the low $40s.

This year, Alberta expects to take in $1.4 billion in non-renewable resource revenue compared with almost $10 billion two years ago.