EDMONTON – After years of concentrating on paying down the provincial debt, the Alberta government has pried open its wallet and handed out billions of dollars for building roads, schools and hospitals.
Agriculture will also receive a share of the pie. Its base spending will increase by $262 million to $808 million, primarily for enhancements to farm safety net programs.
“I think that’s a real positive sign,” said Jack Hayden, president of the Alberta Association of Municipal Districts and Counties.
Agriculture spending is projected to increase to about $860 million per year for the following two years. No disaster money has been budgeted. Part of the agriculture budget will be used to pay for the revamped crop insurance program and to help replenish the crop insurance reinsurance fund.
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As well, the $893 million rural transportation grants were reinstated, more money was given for bridge reconstruction and per capita grants to hamlets were reinstated.
However, the lion’s share of the $20.8 billion budget – about 70 percent – will go to four departments: health and wellness; learning; transportation and infrastructure.
A key part of the 2003-04 budget is a three-year $5.5 billion plan to modernize and build new hospitals, roads and schools, Alberta finance minister Pat Nelson said in the legislature April 8.
“Alberta has the strongest economy in Canada and we’re going to keep it that way,” she said.
The government plans to spend $1.5 billion on provincial highways, $970 million on health facilities and equipment and $511 million on schools and equipment.
Part of the education money will be used for rural school modernization projects that were put on hold.
Schools’ base budgets were increased by 4.8 percent, or $231 million for kindergarten to Grade 12 classes.
Alberta School Board Association president Michelle Mulder said while trustees are happy with the increase, it’s still not enough to keep up with an arbitrated salary settlement imposed on the boards, and increased maintenance and heating costs.
Mulder said there is an annual $411 million gap between what the government is giving school boards and what is needed to keep students on the leading edge.
She said it’s too soon to say how much of the money will go to rural schools because funding will be based on per student enrolment in September. With rural enrolments down, rural areas will have difficulty maintaining programs.
Nelson forecast a $1.1 billion surplus in the upcoming budget and even mused about the possibility of paying off the $4.8 billion debt before 2015, possibly even by 2005, the province’s centennial.
“That’s always a soft spot for me, to pay off the debt,” she said.
A healthy oil and gas industry is crucial to the province’s plans. Non-renewable energy revenues are forecast at $4.8 billion a year, but may be even higher if oil and gas prices stay high.
The government also created the Alberta Sustainability Fund to help even out the highs and lows of oil and gas prices. When the government receives more than $3.5 billion from oil and gas revenue, excess money will go into the fund. It can only be taken from the account if oil and gas revenue is less than $3.5 billion.
“If prices go up during the year or if we have surpluses at the end of the year, the only place those funds can go is to the sustainability fund. Extra revenues cannot be used for operating purposes,” Nelson said.
“We’ve replaced volatility with predictability.”
