Alberta Premier Danielle Smith’s First Budget Has $2.4 Billion Surplus, More Spending on Health Care, Education, Police

Alberta Premier Danielle Smith holds her first press conference in Edmonton, on Oct. 11, 2022. (Jason Franson/The Canadian Press)

Alberta’s United Conservative government delivered the 2023 budget on Feb. 28, the last one before a scheduled May election, and it includes a $2.4 billion surplus by 2024, despite more spending across the board.

The budget is balanced, with debt on the decline, according to Finance Minister Travis Toews. He said Albertans pay $20 billion less in taxes than they would if they lived in the next lowest-taxed province.

The surplus is based on revenues of $70.7 billion and $68.3 billion in spending. It also has a $1.5-billion contingency fund.

Alberta’s taxpayer-supported debt will drop to $78.3 billion by the end of 2023–24, which is $17.3 billion lower than estimated in 2022. Overall spending is going up by 3.9 percent.

Assuming the budget is passed, the Smith government will not be introducing any new taxes and will introduce a balanced budget law.

“A new fiscal framework will ensure Albertans’ hard-earned tax dollars are spent wisely by requiring all future governments to balance the budget, with certain exceptions, and use surpluses to first pay down debt and save for the future before investing in one-time initiatives,” said a government statement.

The new legislation would direct 50 percent of surpluses into repaying debt maturing each year, with the remainder going to a new “Alberta Fund” of $1.4 billion.

Spending is tied to population growth and inflation. Last fiscal year, according to Toews, the government paid off over $13 billion in maturing debt.

“Had we, from day one, invested the earnings back into the Heritage Savings Trust Fund, without any additional deposits other than what we have made to date, instead of the $18 billion we have in the fund today, the fund would be approaching $300 billion,” Toews said in his budget address.

A fund of this size would have earned Albertans close to $20 billion a year in investment income, added Toews. He said the new budget provides fiscal stability, enables low taxes, and “will ensure that business investment continues to be preferential to Alberta.”

“It means future generations will not be encumbered with a debt they did not incur,” he said.

Funding for Education, Health Care

Future generations will see education funding bumped by 5.2 percent, a large increase from last year’s 1.7 percent hike. This translates to $8.8 billion for 2023–24 and another $9.2 billion for 2025–26.

The province also pledged to add 3,000 new teachers, educational assistants, and support staff, plus $126 million over three years for more counsellors, psychologists, and interpreters. Another $1.5 billion will go toward special needs students, ESL students, and disabled learning supports. There is also increased funding for student transportation in the budget, and for new school design and construction.

The new budget increases health care spending to record levels, with an additional $965 million added, for a total of $24.5 billion. The money prioritizes hiring more front-line health care workers, and significantly reducing wait times for ambulances, surgeries, and emergency room visits.

The budget caps education tuition increases at 2 percent for 2024–25, reduces Alberta Student Loan rates to prime, and raises student loan repayment rules to $40,000 of income, up from $25,000. The loan grace period will also double from six months to 12 months.

Albertans are promised larger tax refunds or less tax owing on 2022 returns, with tax brackets increasing by 2 percent for 2022 and an additional 6 percent for 2023.

The government will also index the province’s child and family benefit to inflation, which will increase amounts for eligible families by 6 percent in 2023. Last month, a new Alberta program provided $100 per month to seniors, recipients of Assured Income for the Severely Handicapped, and families with children under 18 if their 2021 household income was lower than $180,000. That program continues until June.

A number of budget allotments are directed to public safety and emergency services, including more funding for jails and corrections, contract policing, and sheriffs.

The province has committed to spending $65 million over three years to improve First Nations policing, specifically to fund a new community police service for Siksika Nation, and to enhance policing services for Lakeshore Regional Police Service, Blood Tribe Police Service, and Tsuut’ina Nation Police Service.

A three-year capital plan of $23 billion will be invested in infrastructure projects.

The budget was criticized by NDP Leader Rachel Notley. In a Feb. 28 video response, Notley called it a “fraudulent budget designed to buy votes ahead of the election. ”

“While Danielle Smith’s multi-billion-dollar corporate handout will continue year over year, her one-off affordability programs to help families are all expiring faster than a jug of milk,” Notley said in a tweet. “The UCP is starving education and healthcare.”