Rising taxes, escalating fuel costs and a higher surcharge on booze and tobacco are just a few of the many things Lakeland residents are going to have to put up with moving forward after the provincial government released its 2015 budget last week.
Minister of Finance Robin Campbell was tasked with presenting details of what many have called ‘Alberta's most significant budget in recent memory', with a near $5 billion deficit presented in lieu of the collapse of the worldwide oil market.
While all the talk around the province appears to focus on changes to health care and education spending over the next 12 months, it's a reduction to a fairly inconspicuous provincial program local residents are likely to feel the most.
For well over a year now, the Town of Bonnyville, MD of Bonnyville and City of Cold Lake have waited patiently for provincial dollars to flow into the region to help fund a proposed regional waterline. With the province last week announcing funding for its Water for Life program would be “significantly reduced” in 2015, it appears those dollars may not arrive, leaving the future of the waterline in serious jeopardy.
Speaking to the Nouvelle following the announcement of the budget last week, Bonnyville Mayor Gene Sobolewski admitted he was “incredibly disappointed” by the apparent snub.
“Basically, there's zero funding for the regional waterline in the immediate future, which is incredibly disappointing,” Sobolewski said. “In a conference call between the province and various mayors and reeves in Alberta, we were told the government had to make cuts somewhere and I guess they feel this is the right place to do so.”
He added, “Regardless of that point, I was fairly disappointed.”
Sobolewski wasn't the only local leader perturbed by the province's decision to cut Water for Life funding after MD Reeve Ed Rondeau told the Nouvelle he was “a little upset” there would be no money for the regional waterline project.
“I wasn't surprised,” Rondeau said having been asked what he thought about the water project cutbacks. “The way the province funds its water programs are all over the place. $50 million is peanuts for a provincial water program. The cost of our project alone will probably come in at well over $100 million…it just doesn't make sense.”
There was some good news for the Bonnyville – Cold Lake region though after the province announced it would be spending $43 million upgrading Highway 28 in 2015.
Although the government has yet to disclose where exactly the upgrades would take place along the near 300-kilometre road, Cold Lake Mayor Craig Copeland said he was delighted to see the province finally pay attention to what he has frequently called “Alberta's forgotten highway.”
“I'm really, really happy about the funding for Highway 28,” Copeland told the Nouvelle last week. “$43 million is a start, at least the province is starting to realize just how big a problem that highway is. Now we've got our foot in the door, we should see (spending on Highway 28 continue).”
Another hot-button issue that stirred up municipal leaders in the region was that of MSI (Municipal Sustainability Initiative) funding.
“I'm pleased to see the province has left MSI funding relatively stable for 2015, but I'm dismayed to hear that funding will be cut in the future,” Sobolewski said, pointing out the government intends to reduce MSI spending in 2016 and 2017.
That news didn't go over too well with Rondeau, who believes the province's current MSI formula is low enough as it is.
“I'm really not excited about the MSI monies – if you read between the lines and check out that information carefully you'll notice municipalities don't really get a lot of money. In fact, I'd say they get very little money,” Rondeau said. “To hear they're (going to be reducing that funding even more in the future) is just ridiculous.”
The budget announcement itself carried without much of a fuss at Legislature on Thursday, with Campbell confirming the government plans to spend $48.4 billion in 2015 – barely $300 million shy of a 2014 budget still flush with $100 oil.
Now, 12 months on and with oil at a multi-year low of approximately $48 per barrel, the province has been left with a $7 billion revenue shortfall to fill.
Approximately $1.5 billion of that shortfall will come as a result of new revenues in 2015, with the province upping taxes on tobacco, alcohol and fuel. It will now cost Albertans an extra 16 cents for a bottle of wine and 90 cents for a case of beer. Cigarettes are jumping up $5 to $45 per carton of 200, while the gas tax is going up four cents.
A new health care levy for Albertans earning over $50,000 per year has also been introduced, while the longstanding 10 per cent flat tax has been replaced by a more “progressive” tax regime that will see higher earners subjected to a higher tax rate. The province has also announced a 35 percent increase in traffic fines.
The remainder of the shortfall will be covered by a combination of budget cuts and borrowing from the provincial contingency fund.
Addressing media following the announcement of the budget, Alberta Premier Jim Prentice said he was proud of the “balanced direction” of the 2015 budget.
“We have told Albertans that tough decisions would be needed and Budget 2015 reflects a balanced approach that will see us return to surpluses within three years,” Prentice said. “The budget is the first step in a long-term strategy. This is the kind of planning and stability Albertans want for the long-term with immediate action to get us on the right path immediately.”
The toughest, and most shocking decision of them all came when Campbell announced that the province would be curbing health care spending for the first time in 20 years. The 2015 provincial health budget is $159 million lower than last year, coming in at $18.9 billion.
Most of the cuts will be made at Alberta Health Services, with the provincial health body losing 1695 full-time positions and $286 million in 2015. Provincial health minister Stephen Mandel reassured Albertans that the cuts would not affect frontline services and would instead focus on administration and mid-management efficiency.
“We made a commitment not to impact front line services, or doctors, and we will do that…We look forward to the challenge,” Mandel said. He pointed out that the province planned to add hundreds of continuing care beds in 2015 as well as investing more money into surgeries.
Alberta's education system will receive an additional $145 million in funding, while spending on Human Services will also go up with supports for Persons with Developmental Disabilities (PDD) and the Severely Handicapped program seeing a $72 million jump.
Heather Forsyth, Wildrose leader at the time, kept her words short and sweet when she addressed media following the introduction of the budget, stating the sitting government “has nothing to be proud of” in passing a budget that includes the largest tax increase and largest deficit in Alberta history.
“Quite frankly, I've been in this legislature (for) 22 years and this is a liberal budget passed by a conservative government,” Forsyth said. “I think Albertans are going to be quite aghast by what they see (come as a result of this budget).”
Local Wildrose candidate Scott Cyr backed up his interim leader, taking to social media to give his thoughts on what he sees as an “insulting budget.”
“In our riding we are either losing our jobs, getting reduced hours or having to accept pay roll-backs. To make matters worse, the premier wants to tax us more during this recession,” Cyr said. “This tax increase will cost the average Bonnyville – Cold Lake family about $2,500 per year.”
He added, “The Alberta Progressives are asking us to pay more taxes, receive less wages and to pay the same household bills that are rising at an astounding rate. It is insulting that the premier is putting all the PC mismanagement on our shoulders.”
MLA for Bonnyville – Cold Lake Genia Leskiw said she thought the budget “was a lot better than expected”, admitting she feared the worst having listened to both Prentice and Campbell state this would be a “bold budget” prior to its announcement.
“Looking at this from a distance, I think it's a fair budget,” Leskiw said. “I personally expected it to be a lot worse, but this isn't going to hurt our low income residents and our seniors wont be hurting, so from that aspect I'm very, very happy.”
While she acknowledges not everyone will be happy with the budget and its tax changes, she believes Campbell and his team did everything they could to keep things fair for Albertans.
“At the end of the day, something needed to be done (about the lose revenue stream). Doing nothing absolutely was not a choice,” Leskiw said. “I think it was important we introduced (changes) slowly and carefully, because we couldn't do anything drastic. That's wouldn't have been a responsible course of action.”
She added, “I'm happy we're doing this in a calm, reasonable approach whereby we use long-term planning to eventually even out our deficit and return to a surplus.”
