Weeks before an expected provincial election, the Alberta government has released a budget forecasting record revenue and continued spending on key areas of health, education and infrastructure.
Alberta finance minister Ron Liepert has forecast Alberta’s revenues to increase $1.8 billion to a record $40.3 billion through a combination of higher income tax revenue, strong bitumen royalties and higher federal transfers.
No tax increases have been planned for the 2012-2012 provincial budget, said Liepert Feb. 9 when he delivered the provincial budget.
“There are ways of creating a bigger pie. It’s not just as simple as if you raise taxes, you will get more money. If you raise royalty rates, you will get more money. That is the discussion we want to have with Albertans because we want to have creative ways of making this happen rather than simply just increase taxes,” said Liepert.
Instead, the government is relying heavily on a jump in bitumen royalties from the oilsands to cover its spending goals. The government expects resource revenue of $11.2 billion in 2012-13. They also forecast that number to grow almost 20 percent per year for the next two years.
Wildrose Leader Danielle Smith said the government is dreaming if it expects resource revenue to jump so dramatically.
“These numbers are fudged. There is no way we will see a 40 percent increase in our resource revenue over the next two years,” said Smith.
“It’s an Alice in Wonderland budget. It’s an absolute fantasyland.”
Liepert conceded the province relies too extensively on non-renewable resources that can rise and dip dramatically and create havoc on the budget.
During travels around the province before the budget was released, Liepert said government officials heard that Albertans also believe the provincial economy needs to be diversified beyond oil, gas and bitumen.
“What was a constant theme of what we heard was we are relying too much on non-renewable resource revenue and we have to take a look at our whole fiscal framework,” he said.
“No one is talking of weaning ourselves off non-renewable resource revenue. We recognize the balance is not where it probably should be.”
Deputy premier Doug Horner said the government could increase revenue by creating ways for the economy to grow. By creating a vibrant economy, the government will take in more personal and corporate income tax.
As we grow our economy more, our corporate and personal tax increases without raising rates, said Horner.
Liepert also said Albertans told them not to stop spending money on health, education and infrastructure.
“This is what Albertans said they wanted to see in the budget. We are delivering what they said they wanted to see in the budget in our travels around the province,” said Liepert, who is not seeking re-election.
About 75 percent of the $41 billion in planned spending will go to the core areas of health, education and human services:
•operating grants increased to school boards, colleges and universities
•increase in funding for municipalities
