The Alberta government tabled the 2021 Budget on Thursday, and it comes with big promises to create jobs for economic recovery and combat the COVID-19 pandemic with larger investments in health-care.
Revenue:
In 2021-22, total revenue is estimated to be $43.7 billion. This is $1.4 billion more than the 2020-21 forecast of $42.3 billion.
The revenue forecast for 2022-23 is $47.4 billion and $50.9 billion in 2023-24.
The province says the increase in 2021-22 is due mainly to strengthening personal income tax, resource revenue, and government business enterprise (GBE) net income. Revenue is forecast to grow by an average of 7.9 percent over the following two years. The increases are driven mainly by income taxes, bitumen royalties, and GBE net income.
Expense:
In 2021–22, operating expense is $1 billion higher than the 2020–21 forecast and begins to normalize, remaining relatively flat over the next two years. Total expense is $58.4 billion in 2022-23 and $58.9 billion in 2023-24.
Deficit:
Alberta is expected to run a deficit of $20.2 billion for the last fiscal year ending March 31 and will have an $18.2 billion deficit forecast in the coming fiscal year, which is $2 billion less than the 2020-21 forecast.
Deficits of $11 billion and $8 billion are targeted for 2022-23 and 2023-24 respectively.
The province says the declining deficit can be attributed to decreasing expense as the costs of the pandemic subside and government works to streamline and modernize service delivery, and to increasing revenue as the economy recovers.
Economic Outlook:
The Alberta government says the economic outlook is slightly more positive than in previous reports. This is mainly due to rapid vaccine development, higher oil prices, and slightly better 2019 ‘actuals’ than expected.
In 2020, real gross domestic product fell by an estimated -7.8 percent, which is slightly better than the mid-year estimate of -8.1 percent.
In 2021, real GDP is expected to grow by 4.8 percent, up from the 4.4 percent growth forecast at mid-year.
Alberta’s economy is now expected to reach pre-COVID levels by 2022, one year earlier than expected at mid-year.
The Alberta government has pledged fiscal responsibility and responsible spending.
Capital Plan:
The 2021 Capital Plan invests $20.7 billion over three years. This is an increase of $1.7 billion in 2021-22 from Budget 2020, as the government has committed to getting shovel-ready projects off the ground and Albertans back to work.
The plan will support more than 50,000 direct and 40,000 indirect jobs through to 2024. This includes new funding for 41 projects totaling $825.8 million over three years, including:
• $288 million for education projects, including 14 school projects and an increase to the modular classroom program ($60 million).
• $143 million for five health projects, including the La Crete Maternity and Community Health Centre ($35 million).
• $177 million for transportation projects, including $126 million in new funding for the La Crete Bridge ($9 million from existing funding for a total of $135 million) and $51 million for P3 Ring Road Rehabilitation in Calgary and Edmonton.
• $48.7 million for Environment and Parks capital projects, including David Thompson Corridor upgrades, flood mitigation, and watercourse and watershed resiliency projects.
• $57.3 million for a new Court of Appeal building in Calgary.
The three-year plan also includes $3 billion for capital maintenance and renewal of existing buildings, roads, bridges, and more.
Alberta’s Recovery Plan:
The 2021 Capital Plan provides funding in addition to the capital stimulus invested in infrastructure in Alberta’s Recovery Plan.
Budget 2021 invests $1.5 billion in Alberta’s Recovery Plan, building on the province’s existing strengths in energy, agriculture, and forestry while encouraging diversification in emerging sectors like technology and innovation, and pharmaceuticals, and life sciences.
It also sets aside $500 million in a contingency in 2021-22 to assist with economic recovery.
• $245 million to irrigation infrastructure projects totaling $815 million to expand irrigated acres within existing irrigation districts that will enable long-term, value-added food processing in Alberta.
• More than $900 million in accelerated capital maintenance and renewal projects.
• Approximately $700 million for strategic projects, such as Highway 3 twinning between Taber and Burdett, Highway 40 grade widening between Grande Cache and Hinton, the Highway 201 Bow River Bridge on Stoney Trail, therapeutic communities, and the Lethbridge Exhibition Centre expansion.
• $500 million for municipal stimulus.
• $200 million for Strategic Transportation Infrastructure Program and water infrastructure projects.
• $136 million over 3 years for the Alberta Jobs Now program.
• $166 million over 3 years for the Innovation Employment Grant.
• $500 million in 2021–22 for additional investments in economic recovery.
Historic spending on Health Care:
Budget 2021 provides Health with a total expense of $23 billion, an increase of almost $900 million, or more than four percent, from last year. This excludes COVID-related costs covered by the $1.25-billion COVID contingency.
• $5.4 billion for physician compensation and development, as the government continues to manage these costs through the physician funding framework.
• $3.5 billion combined for community care, continuing care, and home care programs, an increase of $200 million, or six percent, from 2020-21.
• $1.9 billion for drugs and supplemental health benefit programs, an increase of almost $200 million from 2020-21, to address higher drug costs and increased program enrolment.
• $34 million to support mental health and rehabilitation services for children and youth.
For 2021-22, a total of $16 billion is budgeted for Alberta Health Services operations. In addition to responding to the pandemic, strategic priorities such as the Alberta Surgical Initiative, Continuing Care Capacity Plan, and CT and MRI Access Initiative are key priorities for the health system this year.
The budget includes a three-year, $3.4 billion commitment for health-related capital projects and programs, providing:
• $2.2 billion for health facilities, with $143 million for five new priority projects.
• $766 million for Alberta Health Services self-financed capital for parkades, equipment, and other capital requirements.
• $343 million for capital maintenance and renewal of existing facilities.
• $90 million for health department IT projects.
The budget also includes the government’s four-year, $140-million investment to increase access to mental health and addiction services, and the four-year $20-million spend for palliative and end-of-life care.
Education:
Budget 2021 maintains funding for kindergarten to Grade 12 education, despite lower than expected enrolment.
The Capital Plan includes new funding for the construction and modernization of 14 schools as part of the overall $1.6-billion investment in education. Details on the new school projects will be provided in the coming weeks. At the end of the 2019-20 school year, school boards reported a total of $384 million in operating reserves.
The province will see a “modest decrease” in funding for advanced education, to bring post-secondary institution spending more in line with other jurisdictions. However, the Alberta government says Budget 2021 moves forward on a number of key priorities that will enhance post-secondary education in the province.
This includes implementing the Alberta 2030: Building Skills for Jobs initiative and implementing performance-based funding with all 26 publicly-funded post-secondary institutions in Alberta this year.
The three-year Capital Plan provides $191 million to support post-secondary institution projects to expand student capacity and learning environments.
Kindergarten to Grade 12:
• $8.2 billion operating expense for kindergarten to grade 12 (K to 12) education services.
• There is more than $1 billion in funding for 43 additional school projects underway.
• The three-year Capital Plan includes $140 million for the province’s Modular Classroom Program, an increase of $60 million in 2021-22, which allows for the strategic placement of modular classrooms to efficiently address student capacity requirements.
Post-secondary institutions:
• $191 million through the Capital Plan for projects, including the University of Alberta Dentistry Pharmacy Functional Building Renewal and the University of Calgary MacKimmie Complex.
• New funding of $50 million for the Mount Royal University Re-purposing Existing Facilities project.
Children’s Services:
Budget 2021 includes a $56-million increase for a total of $345 million to the Alberta Child and Family Benefit, a cash payment that helps low-income parents.
Budget 2021 also provides a $15-million increase to support at-risk children and families, excluding COVID-19 spending in 2020-21.
Seniors and Housing:
The Alberta government will maintain funding for the 58,250 affordable housing units that serve more than 110,000 Albertans.
Based on recommendations in the recently released report from the Affordable Housing Review Panel, Seniors and Housing is developing a strategic plan and redesign to ensure the affordable housing system’s financial sustainability and ability to respond to growing demand. Also aligned with the panel’s recommendations, Budget 2021 provides $16 million to the Rental Assistance program in 2021-22, which will help more Albertans in need of affordable housing.
Community and Social Services:
Alberta’s government is maintaining seniors benefits for those most in need including $345 million for the Alberta Seniors Benefit which supports over 170,000 seniors and ensures seniors can count on a stable source of income.
Budget 2021 anticipates a return to pre-pandemic program growth rates. It’s investing more into the Assured Income for the Severely Handicapped (AISH) and Family Supports for Children with Disabilities (FSCD) programs to keep up with caseload growth.
The ministry will continue to spend $100 million on the Family and Community Social Services (FCSS) program.
Also included in Budget 2021 is a $5-million commitment to build on successful partnerships that support employment for Albertans with disabilities. Alberta’s government is pledging $7 million for the Civil Society Empowerment Fund to help non-profit organizations and charities, and $2 million to establish four new family-governed resource centres in St. Paul, Grande Prairie, Medicine Hat, and Edmonton for families to help manage their FSCD and Persons with Developmental Disabilities (PDD) services.
Social Services Capital Plan highlights:
• $209 million over three years on family, social supports, and housing in Budget 2021. Building on the 1,200 new units that have been added in the last two years, an additional 1,800 units will be built to house individuals, families, and seniors in need of social supports and housing in communities across Alberta.
• New funding for 500 shelter spaces in Edmonton and Red Deer.
• New funding for the Complex Needs Residential Build, constructing a new housing residence in Calgary with integrated health and social supports, for Persons with Developmental Disabilities (PDD) clients with complex needs.
• $8.2 million over three years for renovations to the Lac La Biche Youth Assessment Centre, which houses youth between the ages of 12 and 17 who require child intervention services. This project will help to modernize the centre, making it safer for staff and youth.
Agriculture and Forestry:
Alberta’s government has set a target to attract $1.4 billion in investment, which will create more than 2,000 jobs in emerging sectors like hemp, agri-technology, and value-added processing. The Government of Alberta is also contributing $245 million to an $815-million investment, in partnership with the Canada Infrastructure Bank and Alberta irrigation districts, to modernize irrigation district infrastructure to drive the expansion of Alberta’s irrigated land base.
The forest strategy will focus on increasing fibre access for the forest industry and maintain jobs through the Forest Jobs Action plan.
Budget 2021 also includes an $841-million increase to funds available to lend to producers through the Agriculture and Financial Services Corporation (AFSC) in order to promote investment in the sector.
Agriculture and Forestry is holding the line on several key programs and services including:
• Maintaining agricultural research funding at $37 million
continuing to fund access to utilities in rural Alberta at $4.3 million.
• Providing $11.5 million in funding to Alberta Agricultural Societies, while speeding up applications.
• Funding the fight against mountain pine beetle at $30 million annually, plus an additional $19 million from the federal government.
Energy:
Energy strategies will support competitiveness in the oil and gas industry, maximize value from hydrocarbons and capitalize on emerging opportunities. The strategies include the Site Rehabilitation Program, the Natural Gas Vision and Strategy, the Alberta Petrochemicals Incentive Program, the Mineral Strategy and Action Plan, and Geothermal Resource Development.
To support improved data collection on environmental outcomes related to parks and public lands, $13 million is provided for the Digital Regulatory Assurance System over the next three years to modernize the regulatory approvals system while continuing to ensure the environmental protections and sustainability Albertans expect.
Alberta is also investing up to $750 million over three years from the Technology Innovation and Emissions Reduction (TIER) fund for a suite of programs aimed at reducing industry’s emissions and supporting more than 3,000 jobs.
Environment and Parks:
The province is investing more than ever in increased enforcement and protection for Crown lands in response to a record-setting camping season last year. Alberta Environment and Parks’ air monitoring division is also receiving almost a million dollars to improve the technology that tracks air quality issues in the province.
The 2021 Capital Plan invests $496 million in agriculture and natural resources projects across the province that will help develop and protect Alberta’s distinctive resources and support environmental sustainability.
• $18 million for the Watercourse Crossing Program that will focus on 50 high-priority crossings in Alberta where a number of fish species are in significant population decline.
• $11 million for the existing Watershed Resiliency and Restoration Program (WRRP) that aims to improve natural watershed functions in order to build greater long-term environmental resiliency from floods and drought.
• $8.4 million for David Thompson Corridor Upgrades project to improve and renew 12 tourism and recreation support sites along the David Thompson Highway. This will improve safety and support the increased demand for recreation and tourism activities in the area, benefiting the tourism industry and making the area more attractive for investment.
• $1 million towards the Designated Industrial Zone Pilot (DIZ) project, which will identify and evaluate potential infrastructure solutions to enable implementation of the DIZ in the Industrial Heartland, including a Regional Water Systems Feasibility Study and an Air Pollutant Abatement Equipment Feasibility Study.
