EDMONTON – If the planets align and gas prices stay high, Alberta is set to be debt free in 2005, just in time for Alberta’s 100th birthday and the next provincial election.
Alberta finance minister Pat Nelson released the province’s 11th straight balanced budget March 24, which some critics suggest deliberately underestimates the revenue forecasts to allow the government to make good news announcements just before the election.
The budget predicts that energy revenue will drop to $4.8 billion next year from $7.4 billion this year. The government has pegged oil at $26 US a barrel, down from $33 a barrel. Gas prices are also predicted to fall to $4.20 per thousand cubic feet from $5.60. Gas is the government’s biggest revenue source next to gambling revenue, bringing in more than $3.3 billion each year.
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“Most industry observers expect energy prices to go down,” Nelson said during a pre-budget news conference.
She said if there is a windfall she would like to pay off the last of the province’s $3.7 billion debt.
“My position is I’d like to pay it off quicker as opposed to later.”
Opposition leader Kevin Taft said underestimating income on purpose is deceitful to Albertans and is a distortion of good accounting.
“The government low balls its wealth and its revenues by billions of dollars,” Taft said after the budget was released.
Overall government spending increased 2.9 percent to $22.9 billion. The government increased health care funding by an extra 8.4 percent to more than $8 billion.
“It remains our single biggest spending area,” said Nelson, who warned that increased spending in health care couldn’t continue.
“This is a crisis that is looming.”
An extra $68 million will be spent over the next two years, transferring the responsibility for ground ambulance services from municipalities to health regions.
The education budget was increased by 5.7 percent to $5.3 billion. Much of that money is expected to be spent rehiring teachers laid off last year after government cuts.
Rural communities also received a big boost with the announcement of an extra $58 million in extra funding for police programs. Cities and towns with populations of more than 5,000 will receive new grants of $16 per capita.
Cities and towns between 2,500 and 5,000 will no longer have to pay for policing.
Ernie Patterson, president of the Alberta Urban Municipalities Association, said municipalities have been asking for extra police funding for 20 years.
“We’ve talked about this for years and nothing happened,” he said.
“This has been a contentious and often frustrating challenge and I think we may be finally seeing some light at the end of the tunnel.”
For many small towns, their police budget makes up 50 percent of expenses.
Jack Hayden, president of the Alberta Association of Municipal Districts and Counties, said the budget was good news for rural municipalities, especially with the extra police funding and the transfer of ambulance costs to regional health authorities.
“We have been working very closely with the province to ensure that rural priorities are heard. Municipalities have been struggling for many years to deliver the services residents require with decreasing resources available.”.
No money was allocated for BSE payments or programs to help offset the hardship in rural areas caused by BSE.
Nelson said all signs point to an opening of the U.S, border and an end to the hardship in rural Alberta caused by BSE.
“We’re anticipating that the devastation will come to an end,” said Nelson, who admitted rural areas have been hard hit.
“A lot of communities have been absolutely devastated,” she said, pinning recovery on a recently announced rural economic development strategy.
In the budget, the government said it expected 42,700 new jobs will be created in 2004. Alberta Agriculture’s budget documents released at the same time said none of those jobs are expected to be created in rural areas.
