EDMONTON – Alberta’s finance minister says the government has already spent $148 million helping people recover from June’s widespread flooding.
Doug Horner says the final bill facing insurers, the province, along with municipal and federal branches of government is likely to be around $5 billion. It’s not known how the cost will be split, but it was said that the province’s share will be large.
“We’re certainly in for some challenges,” he said in a release. “But with a solid commitment from the federal government for their contribution to support disaster recovery, and thanks to our strong economy and higher revenues in first quarter, we are in a good position to help get lives back to normal.”
Horner announced the figures during the province’s first-quarter budget update, which is summed up in the chart below:
Flooding that hit Calgary and other southern Alberta communities two months ago forced 100,000 people to flee and damaged more than 14,500 homes.
Horner said he expects the federal support for flood damage costs will come through faster than it has after previous disasters.
He said, despite flood costs, rising energy prices are helping Alberta’s bottom line.
Operational revenue is $211 million higher from what was projected for the first three months of the fiscal year, primarily due to an increase in oil prices and investment income. Expenses for the same period, meanwhile, were down $113 million.
“Our bitumen bubble has taken a holiday but we’re pretty certain, like a bad penny, it will return,” Horner said.
Due to the volatility of energy prices, though, he adds that there will be no changes to spending.
“It’s vital that government continues to make tough choices, live within our means and seek out efficiencies through results-based budgeting,” he explains. “These actions will maintain our financial strength and position as Canada’s economic engine.”
However, NDP leader Brian Mason would like to see the government re-evaluate the budget.
“I want to emphasize that this… fiscal update changes the budget. It’s very different than what Premier Redford talked about when she spoke about the bitumen bubble and the need to make extensive program cuts to public programs in our province.”
“We believe that in this fall session the government should introduce amendments to the budget that was passed in the spring, based on the new information, and they should bring forward a plan to increase revenues in the province of Alberta so that we can lessen our dependence on volatile royalty revenues,” Mason added. “The government is guilty I think, in many ways, of short term thinking.”
Liberal leader Raj Sherman also decried the provincial cuts, especially to post-secondary education.
“I think the premier should do what she promised to do before the election,” he said. “I believe she should be investing in Albertans, investing in our future, and not cutting essential programs that will build this province. We asked the Redford government, absolutely, to reinvest that money into post-secondary and into K-12 education. They never should have cut it in the first place.”
Horner reiterated that the Redford government would not change its original budget.
“We still have a long year ahead of us, and any number of factors could change things. The flood, of course, has been a great example of this.”
“We still don’t know what’s going to happen for the rest of the year. This is the first three months of the year. This is not the time to start changing your game plan. We need to make sure we have consistent numbers, and the different departments are working with the budget that they have. We are not going to go out there and start changing the budget at this point in time.”
Opposition critics and the Canadian Taxpayers Federation (CTF) suggest that there will be a $5 billion deficit this fiscal year – before flood payments – because the province is borrowing billions for infrastructure.
“We don’t know what portion exactly is going to be covered by the federal government,” said Derek Fildebrandt with the CTF. “We can estimate that we’re going to be on the hook for a lot of that money, and the fiscal update does not account for where the government expects, at least, that to fall.”
“Our projection of the deficit takes into account the operating budget, it takes into account 88 per cent of the capital budget, which is entirely borrowed, and not paid for, and it takes into account approximately $3 billion we’re going to spend this year, in one form or another, on the flood.”
You can listen to the full audio of Horner’s fiscal update below:
With files from Vassy Kapelos, Global News
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