BUDGET 2020: Alberta continues cuts to jobs, corporate tax rates
A new year, another new budget from the Province of Alberta.
The 2019 budget made waves in October when it was announced that funding would be cut from a wide variety of organizations and services throughout the province in a bid to balance the budget by 2023.
Thursday’s budget continues that theme of “finding cost efficiencies,” continuing cuts and predicting a budget surplus as early as the 2022-23 fiscal year.
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“Budget 2020 continues our focus on creating jobs, growing our economy, and streamlining programs and services to ensure a sustainable future,” said Minister of Finance Travis Toews in the release.
“Our plan is working. We are on track to balance the budget by 2022-23 and Alberta’s surplus in that year is expected to be higher than that projected in Budget 2019. We are also maintaining funding for health and education while ensuring each dollar is wisely spent on what Albertans need most.”
The new 2020-23 Fiscal Plan sees a reduction in operating expenses by $1.2 billion (or 2.5%), resulting in a deficit of $6.8 billion for 2020-21, $2.7 billion for 2021-22, and a surplus of $700 million by 2022-23.
The budget is assuming the price of $58US for West Texas Intermediate Oil.
Alberta will continue its plans to reduce the corporate tax rate from 12% to 8%, dropping it to 9% by January 1, 2021 and 8% by January 1, 2022 in an attempt to draw businesses into the province.
The new budget also included a Blueprint for Jobs; Alberta’s plan to decrease the unemployment rate by accelerating growth-oriented projects, furthering red tape reductions, increasing training access for Class 1 drivers, and reclaiming orphan wells, among other initiatives.
The province plans to invest $772 million in a number of new projects, which is expected to create over 3,000 jobs for work on twinning Highway 40, renovating the Peter Lougheed Centre, the creating of new operating rooms, the launch of the Rural Health Facilities Revitalization Program, a Red Deer Integrated Emergency Shelter, and the Bow Reservoir Options project that could see a multi-use dam on the bow river.
The new budget also introduced a 20% tax on vaping products in the hopes of “[discouraging] youth from buying these products.” The tax is expected to generate $4 million in revenue in 2020-21 and $8 million in 2021-22.
Alberta will also see a new tourism levy of 4% for short-term rentals like Airbnb to bring them more in line with hotels and other accommodation providers.
Cuts to the public sector will see an estimated 684 jobs lost, with the majority coming from a 277 job hit to the Agriculture and Forestry department.
Community and Social Services were the next hardest hit, with the budget accounting for 136 fewer jobs in the sector.
A total of 398 jobs will be cut from post-secondary institutions, as well as 138 for certified education staff, and another 106 for non-certified education staff.
The education budget remains steadfast at $8.222 billion for 2020-21, though is expected to increase to $8.247 billion for the fiscal years 2021-22 and 2022-23.
Joel French, the Executive Director of Public Interest Alberta, is calling the budget “an attack on Albertans.”
“The cuts in this budget will negatively impact all Alberta families,” said French in the release.
“The budget is an attack on Albertans who access health care and seniors’ care, K-12 education, post-secondary education, child care, and supports for our most vulnerable. Across the board, Albertans can expect higher out of pocket costs and lower quality services as this budget does not address inflation or population growth.”
Budget 2020-21 can be read in full here.
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