Alberta
City of Red Deer responds to the Provincial Budget
From The City of Red Deer
Given Alberta’s continued economic challenges, The City anticipated a drop in Municipal Sustainability Initiative (MSI) funding and has budgeted appropriately. Administration built The City’s proposed capital plan with a reduction in MSI funding.
“This is the austerity budget we were expecting and planned for as a municipality. We are, however, encouraged to see that municipal capital funding will be legislated as The City’s capital plan relies heavily on this source,” Mayor Veer said. “Our budgets are built with community and province building in mind, and this predictable funding source will provide stability in long-term infrastructure planning.”
Municipalities will also see a province-wide reduction of $30 million in grants in place of property taxes paid by the Provincial Government by 2023 compared to the amounts received in 2018. The amount will be reduced by 25 per cent in 2019-2020 with a further reduction of 25 per cent the following year.
In terms of community safety and crime, one of Council’s priorities in their 2019-2022 Strategic Plan, the Government will continue its investment in the Justice Centre and there will be an additional $50 million investment over the next four years in the Alberta Law Enforcement Response Team (ALERT).
“Safety is the top priority for The City of Red Deer and our citizens. The continued development of the new Provincial Justice Centre reinforces our ongoing efforts to enhance safety in our community by strengthening the court’s ability to uphold charges and obtain justice for victims of crime,” said Mayor Tara Veer. “The additional funding for ALERT is a welcome enhanced investment in combating organized and serious crime with the result of creating safer communities for all Albertans.”
To further our commitment to safety and crime reduction, Red Deer is advocating for several new Crown Prosecutors with the previous announcement of 50 Crown Prosecutors across the province. It is also hoped that Red Deer and region will get a number of the 4,000 addictions treatment spaces announced as part of our response to local social issues.
“As a community, we are disappointed in the lack of funding for the expansion of the Red Deer Regional Hospital in this budget,” said Mayor Tara Veer. “However, the opportunity exists for our community to advocate jointly for this expansion and to work with The Province to develop a pragmatic phasing plan for its development.”
Like many other communities, Red Deer continues to experience gaps in social services for mental health and addictions. The City will work with the Provincial Government on these initiatives including the implementation of mental health and addiction services and opioid response strategies. These initiatives align with Council’s priorities in the current Strategic Plan.
“There is still a need for Provincial infrastructure investment in the form of a 24/7 shelter in Red Deer,” said Mayor Veer. “We’ve discussed this need with the Minister of Seniors and Housing and we will be working alongside her in the coming months to convey the scope and needs in Red Deer to ensure it is included in future budgets.”
While it is still critical that Alberta gets its energy to market, the announcement of the reduction in the corporate tax rate has the potential to stimulate private investment and spur economic development in Red Deer in the meantime.
Administration will continue to review the Provincial budget and watch for more details in the coming weeks. The impact on property tax notices will be calculated in April when the approved municipal operating budget is combined with the Provincial Education Requisition and tax rates are set by Red Deer City Council.
From the Fraser Institute
On Monday, the Smith government announced that beginning next year it will change the way it funds surgeries in Alberta. This is a big step towards unlocking the ability of Alberta’s health-care system to provide more, better and faster services for the same or possibly fewer dollars.
To understand the significance of this change, you must understand the consequences of the current (and outdated) approach.
Currently, the Alberta government pays a lump sum of money to hospitals each year. Consequently, hospitals perceive patients as a drain on their budgets. From the hospital’s perspective, there’s little financial incentive to serve more patients, operate more efficiently and provide superior quality services.
Consider what would happen if your local grocery store received a giant bag of money each year to feed people. The number of items would quickly decline to whatever was most convenient for the store to provide. (Have a favourite cereal? Too bad.) Store hours would become less convenient for customers, alongside a general decline in overall service. This type of grocery store, like an Alberta hospital, is actually financially better off (that is, it saves money) if you go elsewhere.
The Smith government plans to flip this entire system on its head, to the benefit of patients and taxpayers. Instead of handing out bags of money each year to providers, the new system—known as “activity-based funding”—will pay health-care providers for each patient they treat, based on the patient’s particular condition and important factors that may add complexity or cost to their care.
This turns patients from a drain on budgets into a source of additional revenue. The result, as has been demonstrated in other universal health-care systems worldwide, is more services delivered using existing health-care infrastructure, lower wait times, improved quality of care, improved access to medical technologies, and less waste.
In other words, Albertans will receive far better value from their health-care system, which is currently among the most expensive in the world. And relief can’t come soon enough—for example, last year in Alberta the median wait time for orthopedic surgeries including hip and knee replacements was 66.8 weeks.
The naysayers argue this approach will undermine the province’s universal system and hurt patients. But by allowing a spectrum of providers to compete for the delivery of quality care, Alberta will follow the lead of other more successful universal health-care systems in countries such as Australia, Germany, the Netherlands and Switzerland and create greater accountability for hospitals and other health-care providers. Taxpayers will get a much better picture of what they’re paying for and how much they pay.
Again, Alberta is not exploring an untested policy. Almost every other developed country with universal health care uses some form of “activity-based funding” for hospital and surgical care. And remember, we already spend more on health care than our counterparts in nearly all of these countries yet endure longer wait times and poorer access to services generally, in part because of how we pay for surgical care.
While the devil is always in the details, and while it’s still possible for the Alberta government to get this wrong, Monday’s announcement is a big step in the right direction. A funding model that puts patients first will get Albertans more of the high-quality health care they already pay for in a timelier fashion. And provide to other provinces an example of bold health-care reform.
Nadeem Esmail
Senior Fellow, Fraser Institute
From the Montreal Economic Institute
Alberta’s move to fund acute care services through activity-based funding follows best practices internationally, points out an MEI researcher following an announcement made by Premier Danielle Smith earlier today.
“For too long, the way hospitals were funded in Alberta incentivized treating fewer patients, contributing to our long wait times,” explains Krystle Wittevrongel, director of research at the MEI. “International experience has shown that, with the proper funding models in place, health systems become more efficient to the benefit of patients.”
Currently, Alberta’s hospitals are financed under a system called “global budgeting.” This involves allocating a pre-set amount of funding to pay for a specific number of services based on previous years’ budgets.
Under the government’s newly proposed funding system, hospitals receive a fixed payment for each treatment delivered.
An Economic Note published by the MEI last year showed that Quebec’s gradual adoption of activity-based funding led to higher productivity and lower costs in the province’s health system.
Notably, the province observed that the per-procedure cost of MRIs fell by four per cent as the number of procedures performed increased by 22 per cent.
In the radiology and oncology sector, it observed productivity increases of 26 per cent while procedure costs decreased by seven per cent.
“Being able to perform more surgeries, at lower costs, and within shorter timelines is exactly what Alberta’s patients need, and Premier Smith understands that,” continued Mrs. Wittevrongel. “Today’s announcement is a good first step, and we look forward to seeing a successful roll-out once appropriate funding levels per procedure are set.”
The governments expects to roll-out this new funding model for select procedures starting in 2026.
* * *
The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
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