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Saturday , 28 May 2022

Alberta Budget 2022 moving forward

The UCP says Budget 2022 moves Alberta forward by building health system capacity, getting more Albertans working and presenting a balanced budget for only the second time in more than a decade.

“After many challenging years of economic and pandemic hardship, Alberta is moving forward once again,” Travis Toews, President of Treasury Board and Minister of Finance said. “The government’s focused, responsible fiscal management and relentless pursuit of economic growth has put the province on a more sustainable fiscal trajectory. We are now able to present a balanced budget while expanding health-care capacity and helping Albertans develop their skills and find jobs. Budget 2022 will help Alberta move forward into a very hopeful and prosperous future.”

Building health system capacity

Budget 2022 includes yet another record-high health-care investment to expand system capacity and prepare for potential future waves of COVID-19.

Alberta Health’s total operating expense budget is growing by $600 million this year and will grow by a total of $1.8 billion by 2024-25 in order to scale up capacity.

Over the next three years, Alberta will invest $100 million per year to provide additional health-care capacity on a permanent basis, including adding new intensive care unit beds. This means more hospital beds available when Albertans need them and reduced surgery wait times.

The budget also includes a $750-million COVID-19 contingency this year, which will help address the surgical backlog and ensure the province can cover evolving pandemic-related costs.

Getting more Albertans to work

Alberta’s economic recovery depends on all Albertans finding opportunities to build their skills, pursue their passions and support themselves and their families. Budget 2022 devotes more than $600 million over three years to a new initiative called Alberta at Work.

A new component of Alberta’s Recovery Plan, Alberta at Work will provide $47 million over three years in capital funding and $25 million over three years in operating funding to support collegiate programs and charter school expansions, creating pathways for students into higher learning and in-demand careers.

Alberta at Work also provides $171 million over three years to expand student enrolment in areas with skills shortages. Approximately 7,000 additional post-secondary seats will be created in areas such as computer science, information technology and data modelling, finance and financial technology (fintech), engineering, health care and aviation. A further $30 million will be provided for apprenticeship expansion programs, giving Albertans the training and education opportunities they need to secure a rewarding career.

Alberta at Work will also see skills development, training and employment programs receive a boost of $64 million over three years. Additionally, Budget 2022 will invest $20 million in 2022-23 and $10 million in 2023-24 to address barriers to employment – including training in literacy and numeracy, as well as English as a second language courses – for unemployed Albertans. In addition to these investments, Budget 2022 includes $30 million over three years, mostly in commercial driver grants to address a severe shortage of skilled drivers in Alberta, as well as capital funding to expand the veterinary medicine school at the University of Calgary.

Revenue

  • In 2022-23, total revenue is estimated to be $62.6 billion, which is $0.9 billion higher than the forecast for 2021-22. Commodity prices and investment income are expected to moderate in 2022-23 after significant growth in 2021-22.
    • Revenue is expected to grow again in the following years. The revenue forecast for 2023-24 is $63.1 billion and $63.9 billion in 2024-25.
    • In 2022-23, corporate income tax revenue is increasing almost 21 per cent, to $4 billion.

Expense

  • Total expense in 2022-23 is $62.1 billion, which is $2.8 billion less than the forecast for 2021-22.
    • Total expense is $62.2 billion in 2023-24 and $63.2 billion in 2024-25.

Surplus

  • A surplus of $500 million is targeted for 2022-23 compared with the forecasted deficit of $3.2 billion for 2021-22.
    • Surpluses of $900 million and $700 million are targeted for 2023-24 and 2024-25, respectively.

Economic outlook

  • In 2021, real gross domestic product (GDP) rose by an estimated 5.8 per cent, which is higher than the budget forecast of 4.8 per cent.
  • In 2022, real GDP is expected to grow by 5.4 per cent, up from the 5.1 per cent growth forecast at mid-year.
    • Alberta’s economy, as measured by real GDP, is expected to fully recover to 2014 levels this year.

Sticking to the fiscal plan

In the midst of the fiscal challenges presented by the pandemic, the government developed a set of fiscal anchors to guide decision-making: bringing per capita spending in line with other provinces, keeping net debt-to-GDP low and finding a path back to balance.

Thanks to these fiscal anchors, Alberta is presenting a balanced budget for only the second time in more than a decade. Budget 2022 estimates show that Alberta is expected to fall within the projected per capita spending range of the three-province (British Columbia, Ontario and Quebec) average in 2022-23. In 2018-19, Alberta’s operating expense was $48.4 billion and that number has increased by only 0.4 per cent each year since, excluding temporary spending on the pandemic response and the new early learning child-care agreement. This increase is less than population growth and inflation.

In Budget 2021, net debt-to-GDP ratio was estimated to be 24.5 per cent for 2021-22. That number has been revised down over the course of the year and is now forecast to be 18.3 per cent at the end of the current fiscal year. Alberta has one of the lowest net debt-to-GDP ratios in the nation and the government’s responsible fiscal management will ensure the province keeps its position as a leader in Canada. This key anchor is on track to drop in future years, with an expected target of 14.8 per cent in 2024-25.

About Arthur C. Green

Arthur C. Green is an award winning journalist and is from Whitbourne Newfoundland. Green graduated from the CNA Journalism Program. Arthur also studied Business Marketing and Political Science at Memorial University in Essex England and St. John's Newfoundland. Green has worked for such organizations as CBC, CBC Radio, NTV, Saltwire, Great West Media, CKLB Radio, River Radio, Vista Radio, and Postmedia. He also loves Jiggs Dinner and can fillet a Codfish.