COVID-19 Spending Derails Alberta’s Goals To Run A Balanced Budget


With its focus trained on strengthening its health care program in this period, Alberta’s government has called off plans to undertake fiscal restructuring to a later date.

In 2020, the government said it was experiencing a problem with its budget. It’s surprising now that it has decided to raise its spending by 8 percent by proposing a $62bn budget for 2021-2022.

The province’s finance minister, Travis Toews, noted that their demands had changed substantially, so should their budget.

The minister noted that they are not happy with the current situation and have to deal with the associated economic mess. He added that this is where they are now, so they have to make adjustments for them to meet the needs of the people as responsibly as possible.

The province plans to spend $1.25bn in responding to the pandemic and disbursement of vaccines.

The province’s estimated revenue is around $43.7bn. Still, the finance minister noted that they are looking at a deficit of $18.2bn in the following year.

This is the most significant deficit they have seen so far. He added that the province might close the current fiscal year with a shortfall of $20bn, nearly three times what they had projected before the pandemic hit.

The government noted that it might be a while before the economy rebounds to pre-pandemic levels. COVID-19 and an increasing corporate tax impacted their revenues significantly.

However, as the government had promised, they have not introduced any new taxes in the most recent budget. Toews noted that a new tax measure would affect negatively impact the economy and scare away investors.

NDP opposition leader, Rachael Notley, stated that the party is disappointed by recent cuts in spending and how the government has elected to spend whatever cash reserves it has in its coffers. She noted that the current spending plan lacks diversification and a growth strategy.

While the government dangles around its health spending, the total expense per capita is much less now than when the NDP was in government, even when they factor in inflation.

The government is looking to deliver its health service much more efficiently, including contracting some of its functions if the cost savings make sense.

It is also moving forward with its four-year plan to decrease its workforce by about 7.7 percent. The new budget indicated that about 311 full-time employees would be rendered redundant in 2022. The MLAs will debate this budget in March.


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