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Alberta

Alberta budget announces record high health spending including money for new and redeveloped hospitals

Published

2 years ago

8 minute read

Alberta’s government is providing another year of record-high investment, with $24.5 billion in the Ministry of Health’s operating expense this year, an increase of 4.1 per cent from last year. This new funding will focus on addressing areas of priority in the Healthcare Action Plan to improve the health-care services Albertans expect and deserve. In addition, Alberta’s primary health-care system is being strengthened and modernized with a record investment of $243 million over three years.

Budget 2023 provides $3.1 billion in capital funding over three years to further build up Alberta’s valuable health-care infrastructure, an additional $529 million in capital maintenance and renewal for health facilities and a further $732 million in self-financed funding. The $3.1 billion includes funding for the redevelopment and expansion of the Red Deer Regional Hospital, increasing critical services and capacity in one of Alberta’s largest hospitals.

Additionally, $18 million over three years is for further planning for proposed health capital projects across the province, including the stand-alone Stollery Children’s Hospital in Edmonton, a north Calgary/Airdrie regional health centre, expansion of the Strathcona Community Hospital, and new or upgraded facilities in Bassano, Cardston and Whitecourt.

A total of $237 million over three years will go towards the Alberta Surgical Initiative Capital Program, with $120 million in new funding to expand and modernize operating rooms in 15 communities across the province and reduce wait times for surgeries.

The new Health Workforce Strategy will help get Albertans the care they need, when and where they need it. Budget 2023 includes $158 million in 2023-24 to retain and support, attract, grow, strengthen and evolve the health-care workforce, including physicians and nurses.

“Building a resilient and responsive health-care system that meets the needs of Albertans is essential to keeping our province healthy. This is why Budget 2023 includes another record-high health-care investment, so we can put the right health-care professionals, resources and services where they are needed most.”

Jason Copping, Minister of Health

Budget 2023 invests in emergency medical services (EMS) to improve ambulance response times. An increase of $196 million over three years will help hire more staff and implement recommendations from the Alberta EMS Provincial Advisory Committee. A new capital program will provide $15 million over three years to put more ambulances on the road.

As part of the initiative to improve primary health care, Alberta’s government is investing more than $2 billion in 2023-24. This includes $243 million over three years to strengthen the province’s primary care system, including implementing the recommendations from the three advisory panels of Modernizing Alberta’s Primary Health Care System (MAPS) established in fall 2022. These recommendations will inform the government’s immediate next steps and a path forward over the next five to 10 years.

“Investing in health care is not just a cost, it’s an investment in our future. By increasing critical health-care capacity, we can ensure that our health-care system is equipped to meet the needs of our citizens and provide the highest quality of care possible.”

Travis Toews, President of Treasury Board and Minister of Finance

“Over the next three years, Alberta’s government is investing $23 billion into public infrastructure through the 2023 Capital Plan. By building and revitalizing hospitals, schools, courthouses and other public facilities, we are investing in the critical infrastructure projects that Albertans need and help keep people working.”

Nathan Neudorf, Minister of Infrastructure

Budget 2023 includes nearly $4.3 billion in combined operating support for community care, continuing care and home care programs, an increase of more than 15 per cent, or $570 million from the 2022-23 forecast. An investment of $1 billion over three years will support continuing care transformation that will shift care to the community, enhance workforce capacity, increase choice and innovation, and improve the quality of care within the sector. In addition, there is $310 million over three years for the Continuing Care Capital Program, which supports modernizing continuing care facilities, developing innovative small care homes, providing culturally appropriate care for Indigenous Peoples and building new spaces in priority communities having the greatest need.

Budget 2023 includes operating expense of $148 million in 2023-24 for the Ministry of Mental Health and Addiction. In addition, it supports Alberta Health Services with additional funding to reduce wait times for mental health and addiction services and address gaps in the system. Alberta spends more than $1 billion per year on mental health and addiction programs and services, excluding physician billings. Over the next three years, Alberta’s government will also invest $155 million in capital funding to continue building holistic, long-term recovery communities where Albertans will be able to access detox services, treatment medications, peer support, and help with skills and training.

“Alberta has emerged as a national leader in building out recovery-oriented systems of care for addiction and mental health. The historic investments included in Budget 2023 will help us further expand treatment and recovery services, enabling us to support more Albertans in their pursuit of recovery.”

Nicholas Milliken, Minister of Mental Health and Addiction

Budget 2023 highlights

  • $6.2 billion budgeted in 2023-24, increasing to more than $6.4 billion by 2025-26 for physician compensation and development programs.
  • More than $250 million over four years (beginning in 2022-23) for recruitment and retention programs under the agreement with the Alberta Medical Association so more Albertans can access family doctors, and to provide more support to help physicians keep their clinics open and running.
  • More than $2 billion per year for Drugs and Supplemental Health benefit programs. The Seniors Drug program budget is the largest component of this suite of programs, with $693 million budgeted in 2023-24, supporting more than 700,000 seniors.
  • More than $2 billion in 2023-24 to support primary care in Alberta, including payments to family doctors.
  • $125 million over three years as an initial investment, providing funding for early opportunities to improve primary care identified through the Modernizing Alberta’s Primary Health Care Systems (MAPS) initiative.

Budget 2023 secures Alberta’s bright future by transforming the health-care system to meet people’s needs, supporting Albertans with the high cost of living, keeping our communities safe and driving the economy with more jobs, quality education and continued diversification.

Related Topics:

This is a news release from the Government of Alberta.

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Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn

Published on November 21, 2024

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From the Fraser Institute

By Tegan Hill

According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.

The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.

For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).

And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.

In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.

This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.

Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.

Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.

Of course, if the government falls back into deficit there are implications for everyday Albertans.

When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.

According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.

Author:

Tegan Hill
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Alberta

Premier Smith says Auto Insurance reforms may still result in a publicly owned system

Published on November 21, 2024

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Better, faster, more affordable auto insurance

Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.

After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.

Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.

“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”

Danielle Smith, Premier

“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”

Nate Horner, President of Treasury Board and Minister of Finance

Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.

Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.

Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.

In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.

Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.

By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.

“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”

Nathan Neudorf, Minister of Affordability and Utilities

Quick facts

  • Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
  • A 2023 report by MNP shows
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