Increased taxes, cuts to government spending and more borrowing to pay down debt are the some of the takeaways from this year’s provincial budget.
The fiscal road map, which was handed down in the Legislature March 26, is intended to chart the province back into the back within three years.
Positives for the Westlock region include funding for traffic signals at Highway 18 and 108 Avenue, completion of work at Pembina North Community School and a modest spending increase to Assured Income for the Severely Handicapped (AISH), although the two capital works projects had previously been announced.
Barrhead-Morinville-Westlock MLA Maureen Kubinec, who is also culture minister in the ruling Progressive-Conservative government, was upbeat, but realistic about the financial plan.
“This is a really balanced and strategic approach to our fiscal situation we find ourselves in,” she said Friday.
“We have been dependent on very volatile energy resource and this is a way for us to start to live within our means. It’s not a really fun, happy, happy budget, but it’s a very realistic budget so that we can deal with our reality.”
From the first day of 2016, the province will introduce two new personal income tax brackets.
People earning over $100,000 a year will pay an extra one-and-a-half per cent on their taxable income and those making over $250,000 be asked to chip in two per cent.
If you make under $100,000, you’ll continue to pay 10 per cent.
A healthcare contribution levy will be introduced July 1, but it will only apply to those who earn over $50,000 a year and will be capped at $1,000, once the salary hits $130,800 yearly.
Kubinec said that during her consultation with constituents, a separate healthcare payment was consistently raised as something they would support.
“One of the things I heard was about some sort of a way to pay for our healthcare,” she said. “They referred to the premiums. Well we’re not going back to the premiums, but we are going to a levy which will not affect lower-income families.
“It’ll be a line item on your tax return, so there’s not an administration cost.”
Other increases include so-called “sin taxes”, which have already been rolled out.
After 12:01 a.m. on March 27, drinkers are paying about a dollar more for a case of beer.
Tobacco went up at the same time, with those who like a puff being asked to pay $5 more for a carton of 200 cigarettes.
Prices at the gas pump also rose as the province moved quickly to increase fuel tax from $0.09 to $0.13 per litre.
Insurance premiums are also set to increase, going up to three per cent for life, accident and sickness coverage and four per cent for all other types.
The amount you can claim back from charitable donations is also going down. The rebate you can claim on charitable gifts over $200 will return to the pre-2007 level of 12.75 per cent.
The Wildrose candidate for the Barrhead-Morinville-Westlock riding at the next provincial election, Glenn van Dijken, was critical of the government’s tax increases.
“We will never tax our way into prosperity,” he said.
He also disapproved of many other elements of the budget like funding for carbon capture and storage programs, as well as MLA and ministerial pay.
“What I see in the budget is essentially PCs that have not learned to get their spending under control,” he said.
“We need to address the wasteful spending that is occurring in the province.
“One of them is the carbon capture that they are continuing with, $315 million [this year] … $600 million over the five years. It’s unproven.”
But Kubinec rejects that claim, saying she thinks the program is good for Alberta.
“We’re on the right track with carbon capture and storage,” she said. “We have to find a way to protect the environment and we are doing what the science is telling us should work.”
She also rejected van Dijken’s claim that the province’s MLAs, ministers and top bureaucrats are overpaid.
“MLAs, the premier and cabinet ministers all took a five per cent cut just after Christmas,” said Kubinec.
Despite their differences, both agree that increases in corporate taxes was not the way to go.
“Corporate Alberta is more than just big oil companies,” said Kubinec. “The person who owns the Tim Horton’s or the Boston Pizza, they are corporate Alberta as well.
“By raising that corporate rate what we would do is put us on the same level as some of the other provinces and we could see some of those corporations leave, and we don’t want that.
“Research tells us that for every one per cent increase in corporate tax, it’s 9,000 jobs that are lost.”
Van Dijken was of much the same opinion.
“Canada is the second lowest tax regime on the globe,” he said. “Big business moves to where they can gain advantage based off of tax.
“Our taxation of corporations has to be fair, it has to be equal or slightly better than all the other territories and regimes that we’re competing against.”
Where van Dijken would like to see further saving is cutting handouts to companies.
“I believe that the way to address some of the issues on the corporate welfare side of things is where we have to look.
“We have a corporate welfare program that rewards a lot of the PC friends with contracts and programs that need to be addressed.
“It’s unnecessary spending at this time of difficulty.”
Both also agree that the province needs to live within its means.
To that end the government has a number of cuts to public services and program funding planned.
Year-on-year, funding for health, education and Kubinec’s own culture and tourism portfolio is down.
The government says that the cuts will not affect frontline services, with many of the savings coming from not rehiring back-office positions.
In the case of Kubinec’s ministry, she sees this equating to savings, but not a drop in service.
“Everybody is looking at a five per cent cut,” she said. “The first place we start is in our department and looking at efficiencies.
“We’ve cut 17 positions but we recognized there was a problem back in December, so we instituted a hiring freeze at that point. Those 17 positions don’t actually work out to 17 people losing their jobs.
“Through attrition and moving people to other areas we have been able to do that with maybe one job loss.”
