FOR IMMEDIATE RELEASE
CALGARY, AB – The budget delivered by the Government of Alberta today is a tough but realistic document that sets out a sensible plan to help citizens adjust to a reduced dependence on royalty revenues.
The $48.4-billion budget introduces moderate new taxation to offset the precipitous decline in oil revenues, but also takes a patient approach to dealing with an estimated shortfall of $7 billion this year. If this and subsequent governments stick to the plan of strategic investments, fiscal discipline and focus on improving value from the public sector, over the long term these actions will ensure the next generation of Albertans will continue to prosper.
“This budget strikes a reasonable balance between cutting costs and finding new revenue,” said Janice Plumstead, Senior Economist for the Canada West Foundation. “It is a relief to see that the cuts are not so deep that they are likely to drive an already stressed economy into recession.”
The Alberta government posted a $5-billion deficit and drew its contingency fund down to $2.5 billion. This means the heavy lifting is not done. This gap will need to be closed in the next two budgets, which will require extreme discipline.
Albertans will feel some pain, Plumstead said, particularly due to new levies to fund health services, increases to taxes on gasoline, alcohol and tobacco and other fee increases. While there were no hikes to corporate taxes or royalties, the government ended its 10 per cent flat income tax system, introducing new tax brackets for people earning more than $100,000.
“Most Albertans will feel the effect in their wallet, but residents with greater income will be paying the most,” Plumstead said. The government also introduced a new Alberta Working Family Supplement and enhanced the Alberta Family Employment Tax Credit to help protect low-income families.
Alberta will remain business competitive compared to other Canadian provinces by retaining its tax advantage.
The Canada West Foundation focuses on the policies that shape the West’s quality of life. Through our evidence-based research and commentary, we provide the objective, practical solutions. For more than 40 years, we have been a passionate advocate for western Canada.