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Alberta

Alberta government must restrain spending in upcoming budget to avoid red ink

Published

1 month ago

4 minute read

From the Fraser Institute

By Tegan Hill and Milagros Palacios

Whether due to U.S. tariffs or lower-than-expected oil prices, the Smith government has repeatedly warned Albertans that despite a $4.6 billion projected budget surplus in 2024/25, Alberta could soon be in the red. To help avoid this fate, the Smith government must restrain spending in its upcoming 2025 budget.

These are not simply numbers on a page; budget deficits have real consequences for Albertans. For one, deficits fuel debt accumulation. And just as Albertans must pay interest on their own mortgages or car loans, taxpayers must pay interest on government debt. Each dollar spent paying interest is a dollar diverted from programs such as health care and education, or potential tax relief. This fiscal year, provincial government debt interest costs will reach a projected $650 per Albertan.

And while many risk factors are out of the government’s direct control, the government can control its own spending.

In its 2023 budget, the Smith government committed to keep the rate of spending growth to below the rate of inflation and population growth. This was an important step forward after decades of successive governments substantially increasing spending during good times—when resource revenues (including oil and gas royalties) were relatively high (as they are today)—but failing to rein in spending when resource revenue inevitably declined.

But here’s the problem. Even if the Smith government sticks to this commitment, it may still fall into deficit. Why? Because this government has spent significantly more than it originally planned in its 2022 mid-year plan (the Smith government’s first fiscal update). In other words, the government’s “restraint” is starting from a significantly higher base level of spending. For example, this fiscal year it will spend $8.2 billion more than it originally planned in its 2022 mid-year plan. And inflation and population growth only account for $3.1 billion of this additional spending. In other words, $5.1 billion of this new spending is unrelated to offsetting higher prices or Alberta’s growing population.

Because of this higher spending and reliance on volatile resource revenue, red ink looms.

Indeed, while the Smith government projects budget surpluses over the next three fiscal years, fuelled by historically high resource revenue, if resource revenue was at its average of the last two decades, this year’s $4.6 billion projected budget surplus would turn into a $5.8 billion deficit. And projected budget surpluses in 2025/26 and 2026/27 would flip to budget deficits. To be clear, this is not a far-fetched scenario—resource revenue plummeted by nearly 70 per cent in 2015/16.

In contrast, if resource revenue fell to its average (again, based on the last two decades) but the Smith government held to its original 2022 spending plan, Alberta would still have a balanced budget in 2026/27.

Bottom line; had the Smith government not substantially increased spending over the last two years, Alberta’s spending levels today would align with more stable ongoing levels of revenue, which would put Alberta on more stable fiscal footing in the years to come.

Premier Smith has warned Albertans a budget deficit may be on the way. To mitigate the risk of red ink moving forward, the Smith government should show real spending restraint in its 2025 budget.

Tegan Hill

Director, Alberta Policy, Fraser Institute

Milagros Palacios

Director, Addington Centre for Measurement, Fraser Institute
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Alberta

Former Chief Judge of Manitoba Proincial Court will lead investigation into AHS procurement process

Published on March 9, 2025

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Deputy Minister of Jobs, Economy and Trade Christopher McPherson has issued the following statement on an independent third-party investigation into procurement and contracting processes used by the Government of Alberta and Alberta Health Services (AHS):

Deputy Minister of Jobs, Economy and Trade Christopher McPherson has issued the following statement on an independent third-party investigation into procurement and contracting processes used by the Government of Alberta and Alberta Health Services (AHS):

“While serving as Acting Deputy Minister of Executive Council, Premier Danielle Smith asked me to establish a credible, independent, third-party investigation into the procurement processes used by the Government of Alberta and AHS and their outcomes.

“I have informed Premier Smith that the Honourable Raymond E. Wyant, former Chief Judge of the Provincial Court of Manitoba, will lead this investigation. I asked Premier Smith to issue a ministerial order to facilitate his work and she has done so. Judge Wyant’s work on this matter begins immediately.

“Judge Wyant was appointed to the Manitoba bench in 1998 before becoming Chief Judge in 2002. Prior to his service on the bench, Judge Wyant worked as a criminal defence lawyer and Crown attorney and was acting deputy director of Manitoba prosecutions at the time of his appointment to the Bench. He has also taught law for many years at Robson Hall at the University of Manitoba.

“Judge Wyant will review the relevant legislation, regulations and policies related to procurement typically used by Government of Alberta departments and agencies, specifically AHS, and their application to the procurement of pharmaceuticals and to services offered by chartered surgical facilities. Questions that Judge Wyant will consider are outlined in the attached terms of reference, and include whether or not any elected official, Government of Alberta or AHS employee, or other individuals, acted improperly during the procurement processes. Judge Wyant will make recommendations to the government for improvement or further action as appropriate.

“Appointed under the Government Organization Act, Judge Wyant will operate independently of government. The Government of Alberta will provide Judge Wyant with access to all relevant documents held by its departments and AHS, as well as facilitate interviews with relevant individuals.

“Judge Wyant has been given a budget of $500,000 to undertake this important work, including to retain legal and audit assistance at his discretion. He is being paid $31,900 per month, which is the same remuneration rate as the Chief Justice of the Alberta Court of Justice.

“To ensure additional independence, Service Alberta and Red Tape Reduction will hold the budget for this third-party investigation.

“Judge Wyant will deliver an interim written report by May 30, 2025. A final written report and recommendations will be delivered by June 30, 2025, and it will be posted on alberta.ca.”

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Alberta

Province announces funding for interim cardiac catheterization lab at the Red Deer Regional Hospital

Published on March 9, 2025

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Alberta’s government is partnering with the Red Deer Regional Health Foundation to expedite the delivery of life-saving cardiac services to central Alberta residents.

Alberta’s government is partnering with the Red Deer Regional Health Foundation to expedite the delivery of life-saving cardiac services to central Alberta residents.

Alberta’s government is committed to ensuring that Albertans have access to the health care they need, including life-saving cardiac care and lab services, no matter where they live. For those in central Alberta, the Red Deer Regional Hospital Centre plays a critical role in providing that care, which is why the $1.8-billion Red Deer Regional Hospital Centre redevelopment project includes two state-of-the-art cardiac catheterization labs.

While the project is expected to be completed by 2031, the government recognizes the urgent need for cardiac services for the 450,000 Albertans from Red Deer and surrounding rural communities. If passed, Budget 2025 will provide $3 million in startup funding and ongoing funding to cover the operational costs for an interim cardiac catheterization lab at the Red Deer Regional Hospital Centre.

“Every Albertan should have access to the health care services they need close to home. Albertans living in the Red Deer area have long advocated for a cardiac catheterization lab and I am pleased to support a project that we know will help save lives.”

Adriana LaGrange, Minister of Health

A cardiac catheterization lab is a dedicated space where specialized teams can carry out diagnostic tests that examine and evaluate heart function to aid in the diagnosis of cardiac health concerns and treatment of coronary artery disease. The lab will be equipped with specialized imaging equipment to allow for cardiac procedures primarily including ablation, angiogram and angioplasty.

The interim cardiac catheterization lab will be located within the existing Red Deer Regional Hospital Centre in a space currently being used as a physician’s lounge. Preliminary design plans are already in place and construction is expected to begin by fall 2025.

The Red Deer Regional Health Foundation has committed to funding the capital cost of the project, which is expected to be about $22 million.

In October 2024, the foundation announced the signing of a memorandum of understanding with Alberta Health Services to fast-track the opening of a cardiac catheterization lab at Red Deer Regional Hospital Centre.

“We are incredibly grateful for the generosity of the Donald and Lacey families, whose support is bringing life-saving cardiac care closer to home for the benefit of all central Albertans. Together with all our health care partners, their commitment to advancing health care will make a lasting impact on countless lives for years to come.”

Manon Therriault, chief executive officer, Red Deer Regional Health Foundation

The foundation’s work is made possible by the generosity of donors, supporters and champions across the region. To support the development of the interim cardiac catheterization lab, the foundation announced a $10-million donation from the John Donald family.

“I am pleased to support the development of cardiac services in central Alberta, something we’ve long advocated for. This initiative will provide essential care to our community and ensure that more lives are saved closer to home.”

John Donald, Red Deer Regional Health Foundation donor

By prioritizing the development of an interim cardiac catheterization lab, patients will have access to critical services about three years earlier than expected. The interim cardiac catheterization lab is expected to be operational in early 2027.

“Developing this lab will allow us to treat more cardiac patients closer to home and support them in their recovery. Enhancing our cardiac services will also support our efforts to recruit and retain the talented professionals needed to care for our region’s patients.”

Janice Stewart, chief zone officer, Alberta Health Services Central Zone

Being able to meet the needs of the province’s rapidly growing population is a top priority for Alberta’s government.

Quick facts

  • The $1.8-billion Red Deer Regional Hospital Centre redevelopment project will upgrade several services throughout the hospital site, including:
    • an additional patient tower
    • six new operating rooms
    • a new medical device reprocessing department
    • two new cardiac catheterization labs
    • renovations to various areas within the main building
    • a newly renovated and expanded emergency department
    • a new ambulatory clinic building to be located adjacent to the surface parkade

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