Highlights of the 2013-2014 Alberta Budget!

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Here are the highlights of Alberta’s 2013/14 Budget! Revenues are estimated at $38.6 billion, $36.4 billion in expenses (0% increase) with a $2.2 billion deficit. Last year, the government was projecting a surplus of $1 billion and $49 billion in revenues in 3 or 4 years with a surplus of $5 billion with surpluses to be added to the Sustainability Fund.

The 3rd quarter report shows revenues at $28.064 billion – $763 million lower than budgeted. Note that resource revenue was $2.431 billion lower due to a rapidly changing energy market, discounted bitumen prices by 23% (!), lower land sales, higher exchange rates and global uncertainty & impact on oil and gas prices. Note that the Disaster / Emergency Assistance program budgeted $26 million and due to severe weather insurance claims and forest fire fighting, $587 million was expended! Lastly note that Doug Horner has indicated that about $600 million has partially offset revenue expectations due to higher corporate income tax, stronger investment income, and, higher gaming and liquor sales. Also note that Ministry expenses were $447 million lower. The deficit stands at $1.98 billion – $498 million higher than expected. The 2012/2013 deficit is estimated at $3.5 – $4 billion. As of Dec 31/12 the Sustainability fund was at $3.4 billion. The Heritage Trust Fund stands at $16.5 billion with $286 million added in 2013/2014.

The highlights:

• Health – increasing the budget by $500 million – 3% increase
• Education – increasing by $204 million
• A new umbrella program, an institute, to foster collaboration of the post secondary institutions, research, innovation and technology commercialization system focusing on energy & environment, health, agriculture, food and water
• No increase public sector compensation and some reduction in manpower
• A fully funded Capital Plan – average $5 billion each year in the next few years (with responsible borrowing) Some projects have been deferred and some cancelled. Keeping commitment to 50 new schools & 70 school modernizations.
• Forecasting net asset position at $44 billion by 2016.

No Fear

  • No Klein style hacks & clashes – the goal is to be lean & mean.
  • No tax reform with increased taxes and provincial sales tax.
  • No higher royalties.
  • Continued spending on the non-oil economy.
  • Will not balance the budget on the backs of municipalities.

Did You Know?

  • Approximately 30% of Canada’s exports are from crude oil – 17% to the US & 12% to the world.
  • Approximately 50% of the Province’s expenses are for Health and Human Services, and, approximately 25% for Education, and Alberta Enterprise & Advanced Education.
  • The province is growing by about 100,000 per year – in 17 years Alberta’s population is estimated at 5 million.

For the History Buffs

In 1935, when the Social Credit party took over, the issues were drought and farm bankruptcies. Aberhart promised a monthly $25 dividend, provision of adequate seed and feed supplies for needy farmers, improved agriculture prices, and, careful administration of relief funding. In 1936, debt interest payments sucked up 1/2 of the province’s revenues (!) and income taxes were hiked and a sales tax introduced. Aberhart was unable to keep his promise on the $25 monthly dividend. But, what tremendous courage Aberhart had and what hope he brought to Albertans! The Social Credit party remained in power until 1971.

Basic Facts about Canada & Alberta (Statscan)

Canada
Population – est 35,002,447
Population – 15 years & over – 28,242,000
Labor Force – 18,865,300
Employed – 17,494,700 -note 19% are part time
Unemployed – 1,370,600 – 7.3% – Participation rate – 66.8%
GDP – expenditure based – $1,628,295,000,000 as of 2011
GDP at Market Prices – $1,833,400,000,000 as of 4th Q 2012

Alberta
Population – est 3,906, 839 – 2.9%+
Population – 15 years & over – 2,960,470 (2011 Census) (Last year 3,006,600)
Labor Force – 2,276,300
Employed – 2,175,000 – note 15.6% are part time
Unemployed -101,400 – 4.5% – Participation rate – 72.9%
GDP – $274,717,000,000 expenditure based as of 2011