Alberta Premier Rachel Notley recently released Alberta’s budget for the next year, the first for this province since the NDP came into power. A lot of interesting things happened in this budget that are of significant interest:
No Large Scale Job Cuts
One of the key messages provincial Finance Minister Joe Ceci has been sending is that the provincial government aims to stabilize public services. Though most Albertans expect social services to be drastically cut when times get tough the NDP aims to change that. Ceci said he wants to avoid “knee jerk reactions that would result in firing nurses and teachers during these tough economic times”, something that he feels would only make things worse. He is, however, less definitive on wage freezes and taking a hard line on contract negotiations, declaring that these are subjects that are still under discussion.
Taxes and Fees
The NDP has already increased the corporate tax rate by 2%, from 10% to 12% and has increased income tax rates on individuals who earn more than $125,000 per year. The government has declared they will not be introducing an provincial sales tax, and will not be increasing levies and fees for vehicle registration, mortgage registration, and marriage, death and birth certificates as was planned by the Conservative government.
Diversifying the Economy
The provincial government plans to encourage job generation by diversifying Alberta’s economy. During their campaign they promised to create a tax credit for Alberta businesses that create new jobs. The government also promised to actively support alternative energy, high tech and advanced research, film and television production, small brewing, value-added agriculture and food processing.
Child Care and Tuition
Another election promise of the NDP was to freeze tuition for post secondary students and introduce $25 per day childcare and all day kindergarten as finances permit.
Making Homes Greener
The NDP has promised a retrofitting loan program which would help families, farms and small businesses to reduce their energy usage. This initiative will also create more jobs in the construction industry.
The Bottom Line
Low oil prices have reduced one of Alberta’s key revenue streams by billions of dollars. Ceci has already said that the deficit could be just under $6.5 billion and that the budget likely won’t be balanced until the 2019-2020 fiscal year.
For more financial news and advice call Tim Lacroix today at 403.648.1541.