A new health care levy, a fuel tax increase which is already in effect, and a list of other fee and tax increases came out as highlights of the much anticipated annual budget announcement, late Thursday afternoon.
“It’s never popular when you tax people,” said Town of St. Paul Mayor Glenn Andersen, the day after the budget was announced. Although much negativity surrounded the budget, Andersen was quick to point out that from a municipal standpoint, he was happy to see MSI funding remaining intact.
“We have the MSI we were promised for 2015, so that is good for the town,” said Andersen. “We were really worried about the MSI.”
But, he also admitted that many of the tax and fee increases announced, along with the reintroduction of a health care levy, would impact everyone.
“People are people. Any time they have to pay more, it’s never a positive thing,” he said. Andersen added that he was happy to at least see the health care levy be progressive, so Albertans with less income will pay less.
“It is what it is. This is where we’re at,” said the mayor. He added that reducing the province’s dependence on oil revenue is a good thing.
“Overall, Alberta will do better when you have a stable income coming in.”
County of St. Paul Reeve Steve Upham shared similar sentiments, saying he was happy to hear MSI funding wasn’t hugely affected. He says the budget “struck a good balance of trying to keep things going without inflicting too much pain.”
He noted that it was also probably a good time to increase the fuel tax, and “the reality is, books had to be balanced,” although, he further added, the government is still far from actually balancing its budget.
The 2015 budget has left the reeve “cautiously optimistic” about the county’s project to bring EPCOR water to Ashmont/Lottie Lake, and eventually Mallaig. Because the project was pre-existing, “the language they’ve given us has kept us cautiously optimistic,” says Upham, when speaking about recent discussions with the province.
Lac La Biche-St. Paul-Two Hills Wildrose MLA Shayne Saskiw was among the opposition MLAs voicing strong displeasure with the 2015 budget, and described it as “the largest tax increase in Alberta’s history.”
“When you’re born you’re taxed. When you die you’re taxed,” said Saskiw, last week. “And to top if off, there is now a health tax.”
Despite the tax and fee increases, Saskiw says the PC government will still run a $7.7 billion deficit. The huge deficit number leads him to believe that the budget announced on Thursday is an “election budget,” and that if the PC government is elected to another term, a provincial sales tax will be inevitable.
“It’s going to happen if they get re-elected,” says Saskiw. He estimates that last week’s budget announcements will translate to cost the average Alberta family about $2,500 a year.
“Now is not the time to raise taxes,” says Saskiw. He added that nothing in the budget pointed to a reduction in “wasteful spending,” citing examples such as Alberta Health Services employing almost 10,000 people who make over $100,000 a year in upper and middle management positions.
“You always look for the silver lining, but really, everybody got hit with this,” says Saskiw.
In a bid to increase revenues, Albertans will notice tax and fee increases in the following areas: the province’s fuel tax has already increased from nine cents to 13 cents; a bottle of wine will increase by 16 cents, and a case of beer by 90 cents; taxes on cigarettes will also go up from $40 to $45 for a carton, or 12.5 per cent.
A 35 per cent increase in fines for traffic offences will also come into effect this spring.
The province will also see the end of its flat tax for personal income. Those making more than $100,000 a year will see the 10 per cent rate move up by half a per cent each year, to reach 11.5 per cent by 2018.
Albertans earning more than $250,000 a year will see a slightly higher increase, but by 2019 their income tax rate will drop back from 12 per cent to 11.5 per cent.
Starting July 1, Albertans earning more than $50,000 will also pay a new health care levy. The levy will range from $200 to $1,000 per year, based on a person’s annual earnings.
It is estimated that the levy will bring in $396 million this year, and $530 million by 2016-17, said Finance Minister Robin Campbell, last week.
The province also announced a new refundable tax credit starting July 1, 2016, called the Alberta Working Family Supplement. It was also announced that enhancements would be made to the existing Alberta Family Employment Tax Credit, expected to be effective July 1, 2016, also.
Shortly after the budget was announced, the Alberta School Boards Association sent out a media release, stating that it “fears the direction taken by government may mean school boards across the province will struggle to meet the needs and expectations of schools, students, parents and their communities.”
The ASBA was disappointed that the province did not increase the per student grant, which the ASBA views as “the most equitable way to meet the often complex and diverse needs of students.”
The budget will see a 2.7 per cent decrease in all non-teacher related costs. The province did commit to continuing forward with its current school construction and modernization projects.
Although St. Paul Education Regional Division appreciates that funding has been provided for teachers, “The Government of Alberta has said there will be no cut to front-line workers, however, I disagree,” says SPERD chair Heather Starosielski. “Bus drivers, instructional assistants, custodians, secretaries, are also integral to the operation of a school and delivery of education to our students. SPERD employs almost as many non-teachers as teachers.”
Funding in a number of other areas, such as Program Unit Funding (PUF) and inclusive education, could all be affected. Restrictions have also been put in place that doesn’t allow school boards to have complete control over reserve expenditures.
“Reserves are often utilized to bridge between the tough times when budgets fall short. We have a strong track record of fiscal prudence and while perhaps well intentioned, the imposition of artificial constraints may lead to inefficiencies,” says Starosielski.
Even the increase in fuel tax will have an impact on school boards, since it will affect their transportation department.
Starosielski says it’s too early to gauge the full impact of Budget 2015, but the board and administrators will be reviewing it over the next few weeks.
Post-secondary institutions will also feel the effects of the budget. A short media release from Portage College, which has campuses across the Lakeland, stated that the budget would mean a 1.4 per cent cut in post-secondary funding.
The cuts to the Campus Alberta base grant do not include the 2.2 per cent yearly inflationary pressures that Portage College faces. No other comments were available from the college.
At the beginning of the Finance Minister’s speech on Thursday, he did note that the province would be committing $74 million over three years to improve education outcomes for First Nations students.
