Braid: The UCP produces the budget of its fondest dreams

It’s an Alberta premier’s dream budget for the run-up to an election campaign. Or a leadership vote

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It takes one incredible Alberta budget to draw even a moment’s attention away from Russia’s appalling invasion of Ukraine.


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This is one incredible Alberta budget.

It balances for only the second time since 2008, even projecting a surplus of $511 million, while forecasting more small surpluses to come.

The budget raises spending on health care by $600 million, with a plan to build surplus capacity for normal times and headroom to handle future waves of COVID-19.

The UCP government that prided itself on cost-cutting now promises more spending for advanced education, K-12 schooling, children’s services, and community and social services. Along with health, those big five comprise about three-quarters of budget spending.

This government isn’t about to abandon restraint. The increases, except maybe the health-care boost, are not big enough to satisfy most stakeholders. Some junior departments took cuts.


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But the spending hikes are a sign the government won’t fly the dangerous cost-cutting flag in the next election campaign.

All this is possible because the coffers are bursting with new revenue from resource royalties, individual and corporate income tax, as well as the sale of fuel, cannabis, insurance and much more.


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This is an intensely political document, of course. It comes six weeks before Premier Jason Kenney’s leadership review on April 9. The UCP and the premier remain low in the polls and Rachel Notley’s NDP is well ahead.

Notley herself scorched the budget as useless for ordinary Albertans because it doesn’t help with immediate needs like high utility costs, or end the de-indexing of income tax brackets.

“I was shocked that this government put nothing in this budget to help with the sky-high bills Albertans are paying right now,” she said. “For both gas and electricity, Albertans are on their own this winter.”

In the conservative political world, however, the budget is so close to what the UCP needed that you have to wonder if it’s manufactured.


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It is not. The numbers are real. Some are even quite conservative, especially energy price forecasts.

Last year at this time, the government forecast bitumen revenue of $1.4 billion.

It’s now expected to be $9.5 billion when this year’s numbers are finalized at the end of next month.

For 2022-23, the government projects $10.3 billion.

That’s nearly a tenfold leap, almost enough to eliminate the deficit problem with cash from a single source.

Crude oil and natural gas royalties have each climbed more than $1 billion from last year’s estimate.

Revenue from personal income tax jumped by nearly $2 billion. That’s surely enough to end tax bracket creep instituted by the UCP.

But resuming the indexation of personal taxation would cost the government $200 million. Treasurer Travis Toews says it won’t happen yet.


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Notley says “the UCP’s bracket creep policy takes $850 million from Alberta’s families this term (of office).”

NDP Leader Rachel Notley speaks to reporters on Scotsman Hill on Wednesday, February 9, 2022.
NDP Leader Rachel Notley speaks to reporters on Scotsman Hill on Wednesday, February 9, 2022. Photo by Brendan Miller/Postmedia

Corporate income tax revenue rose from last year’s estimate of $1.8 billion to more than $4 billion.

Delighted, Toews pointed out that the province now raises more money from the current eight per cent rate than it did from the NDP’s previous 12 per cent.

Notley always said the rate drop was a gift to business with no economic benefit. Toews now gleefully claims she was wrong.

All told, government revenue is expected to total $62.607 billion in 2022-23. Expenses will be $62.096 billion. That makes for a surplus of $511 million.

The government is keen to tell you the huge improvement was not all good luck and perfect timing.


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“Without the flattening of operating spending, we would not be announcing a balanced budget today,” Toews claimed at a news conference.

He says that because of three years of UCP restraint, which kept spending increases below half of one per cent annually, Alberta’s per capita spending will come into line this year with the other big provinces, B.C., Ontario and Quebec.

That was the main point of the controversial MacKinnon report on Alberta’s finances. It found that Alberta spending was wildly out of whack in health care and advanced education, especially.

The report became the keystone of UCP fiscal restraint policy. Now Toews is saying the goal has been met, although spending will still be careful.

This budget isn’t for everyone — certainly not the NDP — but it’s a UCP premier’s dream for the run-up to an election campaign. Or a leadership vote.

Don Braid’s column appears regularly in the Calgary Herald.

Twitter: @DonBraid

Facebook: Don Braid Politics



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