By Chris Brown

Budget 2021

Alberta’s deficit forecast at $18.2B in 2021-22

Feb 25, 2021 | 3:28 PM

Budget 2021 predicts Alberta’s deficit to $18.2 billion for the 2021-22 fiscal year.

The deficit forecast for this current fiscal year is $20.2 billion; it was originally budgeted at $7.3 billion one year ago.

The province’s total debt is now at $115.8 billion, including a record $2.8 billion in annual debt-servicing costs. The debt is forecast to reach $132.5 billion by 2023-24, and a return to a balanced budget is not forecast until at least the following year.

Budget 2021 presented today by Finance Minister Travis Toews outlines the United Conservative government’s three main priorities for the upcoming fiscal year beginning April 1.

The budget leans heavily on mass inoculation against COVID-19 by the fall and oil prices rising slightly for an economic rebound to begin in late 2021.

IN THE COMMUNITY

Medicine Hat's Mustard Seed adding new shelter spaces at Alberta government's request

4h ago

HOLIDAYS

Medicine Hat Kiwanis hosting Christmas dinner, applications due Friday

6h ago

IN THE COMMUNITY

'Compassionate Friends' offer peer support for bereaved in Medicine Hat

22h ago

Toews says the economy should be back to pre-pandemic levels by 2022, one year earlier than expected.

READ MORE: Pandemic spending, no tax increases: Some highlights from the Alberta budget

Budget 2021 is short on mentions of projects or funding for southeastern Alberta.

The government will boost funding of health care by an additional $900 million.

“Before the onset of the pandemic, the ministry of health was well underway with a review of AHS. The minister publicly-released the results of that review, but its implementation has been on hold while we have been focused on managing COVID-19,” said Toews while presenting the budget to the legislature. “In the coming months, as we beat back COVID and return to our normal lives, work to improve our health care system will resume.”

The increased funding will be directed to clearing the backlog in surgical wait times and other recommendations from Alberta Health Services that were delayed by the pandemic.

The government will also invest more than $3.5 billion for continuing care, community care and home care programs and $140 million over four years to improve mental health and another $143 million over the three years for extra health-care facilities.

Another $1.25 billion will be directed specifically to fighting COVID-19.

“These are emergency funds that supplement the existing and considerable base budget of the ministry of health, bringing our total expected spending on health care for Albertans to $23 billion,” said Toews.

READ MORE: Mayor reacts to cuts to municipal funding program

$3.1 billion will be spent on supporting the province’s economic recovery. That includes $1.5 billion for key economic sectors such as energy agriculture and forestry. Emerging sectors such as tech and innovation, life sciences and pharmaceuticals.

There is also $500 million in contingency in 2021-22 to assist with economic recovery and a $20.7 billion investment in infrastructure spending that will support 90,000 jobs over the next three years.

Toews said to “stay tuned” for an official announcement on an Alberta Jobs Now program. The budget shows the program will be funded to the tune of $136 million over three years, not including a federal contribution.

Building projects in the 2021 Capital Plan include roads, bridges, overpasses, water projects, gas lines, schools, hospitals, long-term care homes for seniors, addiction treatment centres, tourism infrastructure, and agriculture and natural resources projects that will help develop and protect Alberta’s distinctive resources and support environmental sustainability.

The government will closely watch its spending, endeavouring to bring public sector spending in line with similar provinces and find efficiencies across government departments.

It aims to keep net debt-to-GDP below 30 per cent, gradually bring spending in line with other provinces and release a balanced budget plan once the pandemic ends.

The budget includes no new taxes and new tax increases, though the de-indexing of personal tax exemption limits will continue. That means Albertans’ tax brackets won’t rise with inflation as they used to, leading to higher tax bills.

READ MORE: MLA Barnes reacts to provincial budget

Following the 2021-22 fiscal year, the province targets deficits to drop to $11 billion in 2022-23 and $8 billion in 2023-24.

The government’s forecast for 2021-22 shows revenue of $43.7 billion and expenses of $61.9 billion, base on oil selling at US$46 per barrel.

The government also has revenue and expenses of $41.8 billion and $61.9 billion, respectively in a low scenario and $46.4 billion and $61.8 billion in a high scenario. Those are based on oil prices of US$39 and US$55.5 per barrel.

The price of oil is forecast to rise to more than US$56 per barrel in the 2023-24 fiscal year.

Other highlights from Budget 2021:

• $8.2 billion operating expense for kindergarten to grade 12 (K to 12) education services
• $6.3 to $6.4 billion operating expense for social services ministries
• $166 million over 3 years for the Innovation Employment Grant
• $500 million in 2021–22 for additional investments in economic recovery
• $22 million in 2021–22 for the recovery of the tourism sector
• $568 million over three years for public safety and emergency services

The full 2021-24 Fiscal Plan is available here.