Alberta’s United Conservative government tabled its 2020-21 budget on Thursday.
The Alberta budget is counting on oil and gas to bounce back while pursuing job salary cuts from thousands of public-sector workers.
The budget maintains operational funding at current levels for core services: $8.2 billion for kindergarten to Grade 12 education and $20.6 billion for health.
However, the Opposition NDP has said that when population growth, inflation and other factors are weighed in, those numbers represent significant cuts affecting front-line workers and forcing families to pay more for services such as school busing.
Provincial education will suffer, warn critics
Education advocate Barbara Silva says parents in Calgary will be hit hard by the province’s budget.
“The funding in 2021 will be lower for our students and we will have more students in the system. So, the way that’s realized is that we’re going to have overcrowded classrooms, fewer resources and higher dependency on fundraising — which we’re already seeing,” Silva, a spokesperson for the group Support our Students, said.
“It’s going to be up to school boards to find ways to fill those funding gaps.”
In its budget, the UCP government announced an additional $100 million for provincial education to maintain current levels. However, the funding isn’t coming from the province – instead, it will be from revenue generated from things like facility rentals, school fees and vending machines, as well as the reserve funds of school districts.
“Reserves are an element of any budget contemplation,” Mary Martin from the Calgary Catholic School District explained.
Martin lamented that “like most boards” they’ve been “tucking into” their reserves already over the past few years.
“It’s not sustainable in the long term,” she said.
Speaking to Global News on Friday morning, NDP Opposition finance critic Shannon Phillips said the budget is based on “magical thinking” and is “wildly divergent from reality.”
“That’s inevitably going to lead to more cuts to things like healthcare and education, people losing their jobs, larger classrooms and more crowded emergency rooms,” Phillips said.
Future of affordable housing in Calgary looks bleak, according to Nenshi
Speaking to reporters on Thursday after the release of the provincial budget, Calgary Mayor Naheed Nenshi was outspoken against what he called a “surprise” cut of $53 million to funding for maintenance of affordable housing
“Of all the things you could imagine to cut, this one is a shocker,” Nenshi said.
“We’re talking about the most vulnerable people in the province, often living in very substandard conditions, and basically we are in a position where if someone moves on out of affordable housing, we can’t give their unit to someone else because it doesn’t meet basic life requirements.”
“Without question this means we’re going to close affordable housing units — at a point when we need 15,000 more affordable housing units.”
Nenshi said the city might even be forced to “close entire buildings.”
“Basically, no good can come of this, and if you were going to cut your capital budget, what a bizarre place to cut your capital budget.”
Budget means more taxes for Calgary homeowners, warns Nenshi
Calgary homeowners will also have to do more with less.
According to figures in the provincial budget, the province is increasing education property taxes by 3.1 per cent in 2020-21.
It’s expected the increase will generate an additional $102 million to a total of $2.6 billion.
Calgary Mayor Naheed Nenshi said the hike will be a big hit to residents’ bottom lines.
Speaking on Global News Morning Calgary on Friday, pollster Janet Brown said It’s interesting to see the government add a 3.4 per cent increase on the education portion of property taxes.
According to Brown, the province will have an immunity to blame regarding the increase because the property tax forms are mailed out by municipalities.
“There’s very little understanding in Alberta that when you pay your property tax bill, half of it is going to the province and only half of it is going to the city,” Brown said. “When you get your bill and your bill has gone up, you blame the city.”
“Taxpayers are going to pay more in taxes, that’s for sure. Whether it’s from the province or the municipality.”
“That’s the bad news,” Brown added. “The good news is, hopefully, long-term this will inspire confidence in the private sector that, in fact, their taxes are not going to go up longer-term, that spending is under control, that the deficit is under control, and this will hopefully … spur private sector investment.”
The Alberta Urban Municipalities Association said on Friday that based on its calculations, Albertans can expect to see an increase between $30 and $80 on their bills, depending on the assessment of their homes.
AUMA President and mayor of Brooks Barry Morishita said the increase will force municipalities to grapple with doing more with less.
“We only have one lever of revenue which is property tax, and when it is affected by the space the province takes up, it removes our fiscal capacity,” Morishita said. “We’re calling on the Treasury Board and Finance Minister to have another look at this and consider what the impacts are and hopefully give it some reconsideration going forward.”
What the budget means for Calgary’s private sector
Kenney’s United Conservatives were elected last April on a promise to focus on oil and gas and bring jobs back to Alberta by reducing the corporate income tax rate and red tape.
Brown suggested the UCP seems “very committed” to the philosophy that a decrease in corporate taxes will spur jobs.
“I’m not an economist so I don’t really have an opinion on whether this will work or not, I’m waiting like other Albertans to see if it does work.”
“I think by next January, if we haven’t seen real job growth it’s going to be hard for the UCP to keep that promise and introduce the next decline in corporate taxes.”
Seeming somewhat optimistic, Ronald Kneebone with the Department of Economics at the University of Calgary said the province appears to be trying to do the “basic sort of things” that economics generally recommend to try “to spur an economy like Alberta.”
READ MORE: Alberta budget 2020 winners and losers
In addition, President and CEO of the Calgary Chamber Sandip Lalli said from the business community’s perspective, they feel the stability the government has presented in the fiscal plan and in this budget is “very encouraging.”
“The role of the government is to stimulate the economy and provide long-term policies to have growth. And growth comes from the private sector,” Lalli said.
– With files from Christa Dao and The Canadian Press