In its second provincial budget, the United Conservative government stuck to its plan to reduce spending and create jobs, while stressing its case to the federal government for a “Fair Deal for Alberta.”
Budget 2020 cuts operating expenses by about 2.5 per cent over three years. Alberta is left with an overall debt of just under $88 billion by 2022.
Here’s a look at how some of the changes (and previously announced budget decisions) affect Calgary:
School boards must come up with cash
Budget 2020 ups education spending by $100 million this school year, but the increase comes from school boards’ “own-source/reserve” funding. The government said that could include school fees, facility rentals, other sources and savings.
“School jurisdictions use their own-source revenue and reserves as the government transitions to a new K-12 Funding and Assurance Model to better manage system growth, ensure funds are directed to the classroom, and provide all jurisdictions with sustainable and predictable funding.”
No details were provided on the new model.
Tourism levy on short-term rentals
Do you use short-term property rentals or rent out a property using services like Airbnb and VRBO? The budget extends the four-per-cent tourism levy paid by hotels to include short-term rentals listed on online marketplaces to “level the playing field among temporary accommodation providers.”
The levy will be implemented “mid 2020.”
Do you vape or buy devices or cartridges in Alberta? More details about a vape tax that was announced in Budget 2019 were revealed in Budget 2020.
A 20-per-cent tax will soon be applied on sales of all vaping devices and liquids. The government says the tax is to “discourage youth from buying these products.” It is also expected to generate $8 million a year in revenue.
The government previously made a commitment to hire 50 new prosecutors. We now know those new hires are not imminent, but will be made over four years. However, the budget shows spending on the Alberta Crown Prosecution Service will be cut by $3 million between this year and next. From 2019-2020 to 2020-2021, the amount allocated for prosecutors falls from $105 million to $102 million.
Victims of Crime
The justice ministry will expand the Victims of Crime Fund to include “public safety priorities” with an additional $17 million this year. A ministry spokesperson said details are still being worked out on this initiative and stakeholders will be consulted but that it would focus on preventing people from being victimized by crime. It will include crime-prevention and enforcement projects. The budget says the fund’s financial benefits program will be replaced with a service-based program, but provides no specifics.
Calgary Cancer Centre
By far, the biggest health project in this budget is the Calgary Cancer Centre.
As promised, the UCP is committing $802 million over three years to the facility.
QEII and 40 Avenue interim ramp (near Airdrie)
A new road project included in the budget will see $10 million spent on an interim ramp on Highway 2 and 40 Avenue near Airdrie. The money will be spent over this fiscal year and next.
The UCP’s last budget contained bad news for Edmonton and Calgary’s LRT projects. Nothing has changed in this budget. While the province will honour the $3-billion funding commitment for Edmonton and Calgary LRT projects, most of the money is being deferred and won’t come until after 2022-23.
By then, Calgary will have received just $75 million from the province. All of Edmonton’s money will only come after the three-year budget cycle.
These transit projects receive funding from all three levels of government so the province said it expects federal funding will keep these projects going until provincial dollars kick in.
As expected, government funding for post-secondary education is going down. Advanced Education’s budget is $5.1 billion in 2020-21, a six-per cent cut from the forecast in the last budget. Budget 2020 implements the first phase of a new funding model that includes base funding from the province but is also based on a school’s performance.
Over three years, the UCP will trim Advanced Education spending by 10 per cent to “encourage post-secondary institutions to find efficiencies,” the budget document said.
The province also lists post-secondary schools’ “own-source/reserves” as funding sources.
The ministry of municipal affairs will spend $14 million, or five per cent, less in 2020-21 than it did in 2019-2020. The province said these savings “reflect a further 25-per-cent reduction in the Grants in Place of Taxes program” announced in Budget 2019.
Municipal Sustainability Initiative (MSI) spending goes down from $963 million in 2020-21 to $897 million in 2021-22. Of that $963 million in 2020-21, Edmonton will see $191.5 million and Calgary will see $256.7 million. In 2021-22, Edmonton will see $178.3 million and Calgary will get $236.8 million. The Local Government Fiscal Framework takes over in 2022-23, with spending dropping to $860 million that year.
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