April 15, 2009

Government Finance

Albertans see red over first deficit budget in 16 years

STEPHEN DAFOE

correspondent

EDMONTON

In its first deficit budget in 16 years, the Alberta government anticipates dipping $4.7 billion into debt in an attempt to keep Albertans working through the recession.

Central to the budget is the province’s capital plan that has $7.2 billion in infrastructure spending in 2009-2010, which is part of its three-year commitment to spend $23.2 billion building roads, schools, hospitals and other public infrastructure.

Bill Stewart, vice president of Merit Alberta, the province’s open shop association, said he believes the budget will maintain momentum for Alberta.

“It’s a reaffirmation that the government has committed to its infrastructure commitments it has made to Albertans,” he said.

“There has been an ongoing need for infrastructure investment and the government appears to be stepping up to the plate.”

The investment is a $1 billion or 4.5 per cent increase from the previous three-year total and will allocate $5.8 billion for provincial highways, $5.6 billion for municipalities, $3 billion for health facilities, $2.9 billion for schools and post-secondary facilities, $1 billion for affordable housing, $1.7 billion for climate change initiatives and $325 million in contributions for federal stimulus programs.

Although the government ramped up spending by $1 billion over its previous three-year capital plan, the majority of the increase will be spent on carbon capture initiatives.

Municipal infrastructure and provincial highway projects saw a $621 million and $457 million increase, but other parts of the plan saw decreases in spending compared to 2008-2011 levels.

Premier Ed Stelmach’s Conservative government anticipates that this year’s $7.2 billion infrastructure investment will support more than 80,000 jobs across a province struggling from lower energy revenues and the effects of the global recession.

“It looks like infrastructure investment is (now) first and foremost on their agenda,” Stewart said.

He added that he believes the province’s decision to slash infrastructure spending in the wake of the post-9/11 market contraction was a mistake.

“This (the recently announced infrastructure spending) will come at a good time – there are more contractors that are out there bidding for work now, so it’s a pretty competitive environment,” he said. But not everyone in the province sees the budget in a positive light.

Gil McGowan, president of the Alberta Federation of Labour (AFL), said that while he was pleased the government resisted the temptation to revisit Klein-style cuts, he felt the budget fell short of the mark in helping Alberta’s unemployed, particularly those in construction trades.

“Our big concern is that, despite it’s packaging, this is not a stimulus budget – it is almost a carbon copy of last year’s budget,” he said.

“Albertans, like other people around the country, are floundering as a result of the recession and economic downturn. So, while it’s good news that the Alberta government didn’t throw them an anvil, they also didn’t throw them a lifesaver.”

The president said that he was hoping to see a budget that would not only keep people working, but create jobs for those who have already become unemployed.

McGowan explained that a huge number of full time jobs have been lost in the province since August 2008 and that 29,200 construction and an additional 18,200 manufacturing jobs were lost between November and February.

“When most Canadians think of Alberta, they think of a booming province, but the reality is that we have fallen farther and faster in terms of our economy than any other province in the country,” he said.

McGowan explained that about $4 billion will be spent on oilsands construction projects this year, compared to about $22 billion last year.

“About 75 per cent of planned oilsands spending has simply evaporated and, when you take that much money off the table in a short time, it’s clear how it has very significant economic and employment implications,” McGowan said.

He said he thought the budget could have done more.

“All this budget will do is keep those people who are already employed on the construction of infrastructure projects employed for another year. It’s not going to create any jobs to help the thousands and thousands of construction workers, engineers and others who have lost their jobs on oil sands projects.”

Capital Plan Highlights
• Completing the northeast and northwest segments of the Calgary Stoney Trail ring roads.
• Completing the northwest segment of the Edmonton Anthony Henday ring road.
• Completion of an interchange at Anthony Henday Drive and Stony Plain Road in Edmonton, with a contribution from the federal government.
• Two interchanges on Highway 63 in Fort McMurray and a new bridge over the Athabasca River.
• Continue twinning portions of Highway 63 between Edmonton and Fort McMurray.
• Begin construction to replace the bridge at Highway 22 over the North Saskatchewan River near Drayton Valley.
• Paving and rehabilitation work on highways throughout the province.
• Construction of the Calgary Bow River Weir Project.
• Complete 54 new and replacement schools to be opened by 2010.
• Doubling SAIT’s Trades and Technology Complex’s capacity to deliver more energy, manufacturing and construction programming.

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