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Alberta fiscal update shows improved surplus but raises caution flags about debt

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2 minute read

From the Canadian Taxpayers Federation

Author: Kris Sims 

Fiscal update shows accounting surplus of $2.9 billion

Provincial debt projected to be $86.1 billion

The Canadian Taxpayers Federation is cautioning the Alberta government for its increased borrowing and looming government union contract demands in response to the first quarter fiscal update.

“It’s very good news to see the provincial surplus increasing, but taxpayers are concerned the debt is still going up,” said Kris Sims, CTF Alberta Director. “Premier Danielle Smith did the right thing by passing a law to save money in the Heritage Fund and now the government needs to deliver its promised income tax cut.”

The Alberta government released its first quarter fiscal update Thursday.

The provincial surplus is forecasted at $2.9 billion, which is a $2.5-billion increase from February’s thin forecast surplus of $367 million.

The provincial debt is forecasted to hit $86.1 billion by the end of this fiscal year, up $4.2 billion from the last fiscal year.

Interest on the debt continues to be a challenge, with the government estimated to spend about $3.2 billion on interest charges this fiscal year.

Government revenue is expected to reach $76.2 billion, which is $2.7 billion higher than estimated in Budget 2024. Income tax revenue is expected to be $513 million higher than estimated in Budget 2024.

The government is spending $73.2 billion, which is $101 million higher than estimated in Budget 2024.

Finance Minister Nate Horner raised the issue of government union contract negotiations this happening fall.

“Collective bargaining negotiations are underway with thousands of public sector workers, including teachers and nurses and we’ve promised to cut personal income taxes to save Albertans $1.4 billion each year,” Horner said in a news conference.

“Even though this is an improved surplus, the government doesn’t have cash to spare, so it can’t be blowing the budget on big pay hikes for government unions this fall,” Sims said. “The Alberta government needs to deliver on its promise to cut income taxes.”

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Alberta

Premier Smith to Ottawa: Alberta can’t afford thousands of asylum seekers right now

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From Free Alberta Strategy

For decades, Canada’s immigration policies were uncontroversial – parties across the spectrum maintained generally sensible policies.

But the current government in Ottawa has ditched this consensus, and the public mood is turning fast.

A large influx of newcomers has put a significant strain on public services and the housing market across the country.

Alberta, in particular, is feeling the strain, as our province receives both a disproportionately large share of the immigrants arriving in Canada, as well as by far the largest number of people moving between provinces.

Earlier this year, the Alberta government reported that in the year from April 2023 to April 2024, Alberta’s population had grown a record 4.11%, representing 204,677 people.

This is by far the highest annual growth rate in the country, outpacing second-place Ontario by nearly a full percentage point.

Importantly, international migration is responsible for about 68% of the increase, interprovincial migration is responsible for about 25%, and just 8% is caused by natural increase.

Another area of immigration that has significantly increased in Alberta is asylum seekers, which have more than doubled from 5,076 per year to 11,292 per year.

Of course, this represents just a small portion of the overall immigration to Alberta, and Alberta actually accepts a much smaller share of asylum seekers (about 5% of the total) compared with our population (about 12% of Canada).

But, Ottawa is now pushing to change this – they want provinces like Alberta to accept more of their “fair share” of asylum seekers – despite the fact that Alberta already receives more than its “fair share” of other types of immigrants.

Federal Immigration Minister Marc Millers says the federal government anticipates full cooperation from all provinces and territories as it strives for a fair and sustainable approach to managing the influx.

He says the federal government has “levers that we need to push and pull” when it comes to enticing provinces to agree to their terms:

“The reality is that Quebec and Ontario are facing disproportionate pressures, compared to any other province in the country – as they have been welcoming the majority of asylum seekers,” says the Minister.

“We will have proper incentives for those willing to welcome asylum seekers, and will take a holistic view with regards to other immigration programs based on participation – as this is work we cannot do alone, nor unilaterally. All options remain on the table.”

In other words, the federal government is once again planning on spending more of our tax dollars to effectively bribe the provinces’ to go along with their policies.

This idea isn’t new – Quebec has already urged the Trudeau government to disperse asylum-seekers more evenly across the provinces.

Premier Smith, however, is saying no:

“Section 95 of the Constitution is clear – immigration is an area of shared authority between the federal government and the provinces.”

“We are informing the Government of Canada that until further notice, Alberta is not open to having these additional asylum seekers settled in our province,” she added.

“We simply cannot afford it.”

Maybe, when the full details of the federal government’s plan are made public, the numbers will stack up.

But, based on past precedent, it seems unlikely.

More likely, this is just another agreement with the federal government that Alberta can’t afford to make.

Time and time again, we’ve seen the federal government approach the provincial government with a deal that – in Ottawa’s view – is good for the province.

We know, as we’ve seen with the nationalized childcare fiasco, that these deals very rarely work out for Alberta.

The Free Alberta Strategy continues to be Alberta’s shield against federal overreach, ensuring that Albertans remain in control of our future.

This issue is just the latest battle in which our unwavering defence of our provinces’ best interests can make a real difference.

If you believe in defending Alberta from Ottawa, join us!

Your contribution will help ensure that the Free Alberta Strategy has the resources and voice it needs to push back. 

Donate today to stand up for Alberta’s sovereignty and sustainability!

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Alberta

Healthcare Innovation Isn’t ‘Scary.’ Canada’s Broken System Is

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From the Frontier Centre for Public Policy

By Joseph Quesnel

“Our healthcare system is a monopoly installed at every level with the culture inherent to monopolies, whether public or private. The culture is based on regulation and budgetary controls, closed to the outside world, impermeable to real change, adaptation and innovation. It is a culture that favours inefficiency.”

Why is the Globe and Mail afraid of healthcare reform that works?

The Globe and Mail editorial board seems to find healthcare innovation “scary.”

On Sept. 3, it published an editorial called “Danielle Smith has a scary fix for healthcare,” criticizing the Alberta Premier’s idea to introduce competition in the province’s health system. Premier Smith’s plan involves third-party leasing of underperforming hospitals while the government retains ownership and continues funding.

Let’s be clear: the real problem isn’t Smith’s proposal – it’s the current state of healthcare across Alberta and Canada. Sticking with the status quo of underperformance is what should truly alarm us. Rather than attacking those trying to fix a broken system, we should focus on much-needed reforms.

So, what exactly is Smith proposing? Contrary to what you may have heard, she isn’t dismantling Alberta’s universal healthcare or introducing an American style system. Yet the public sector unions – and certain media outlets – seem to jump into hysterics any time innovation is proposed, particularly when it involves private-sector competition.

Predictably, groups like Friends of Medicare, with their union ties, are quick to raise the alarm. Yet media coverage often fails to disclose this affiliation, leaving readers with the impression that their views are impartial. Take Global News’ recent coverage, for example:

In late August, Global News reporter Jasmine King presented a story on potential changes to Alberta’s healthcare system. She featured a spokesperson from Friends of Medicare, who predicted that the changes would be detrimental to the province. However, the report failed to mention that Friends of Medicare is affiliated with public sector unions and has a history of opposing any private sector involvement in healthcare. The news segment also included a statement from the dean of a medical faculty, who was critical of the proposed changes. Missing from the report were any voices in favour of healthcare innovation.

Here’s the real issue: Canada is an outlier in its resistance to competition in healthcare. Many European countries, which also have universal healthcare systems, allow private and non-profit organizations to operate hospitals. These systems function effectively without the kind of fear-mongering that dominates the Canadian debate.

Instead of fear-based comparisons to the U.S., let’s acknowledge the success stories of countries that have embraced a mixed system of healthcare delivery. But lazy, fear-driven reporting means we keep hearing the same tired arguments against change, with little context or consideration of alternatives that are working elsewhere.

It’s ironic that The Globe and Mail editorial aims to generate fear about a health care policy proposal that could, contrary to the alarmist reaction, potentially improve efficiency and care in Alberta. The only thing we truly have to fear in healthcare is the stagnation and inefficiency of the current system.

Claude Castonguay, the architect of Quebec’s Medicare system, released a report in 2008 on that province’s health system, calling for increased competition and choice in healthcare.

“In almost every other public and private areas, monopolies are simply not accepted,” he wrote. “Our healthcare system is a monopoly installed at every level with the culture inherent to monopolies, whether public or private. The culture is based on regulation and budgetary controls, closed to the outside world, impermeable to real change, adaptation and innovation. It is a culture that favours inefficiency.”

The fear of competition is misguided, and Canadians are increasingly open to the idea of paying for private treatment when the public system falls short.

Let’s stop demonizing those who propose solutions and start addressing the real issue: a system that is no longer delivering the care Canadians need. The future of healthcare depends on embracing innovation, not clinging to outdated models and misplaced fears.

Joseph Quesnel is a Senior Research Fellow with the Frontier Centre for Public Policy.

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