April 30, 2008

Alberta Infrastructure

Billions allocated to infrastructure in Alberta’s 2008 budget

RICHARD GILBERT

staff writer

The Alberta Budget 2008 unveiled by Ed Stelmach’s government last week plans to inject a massive multi-billion dollar investment into infrastructure development in the next three years.

When the people of Alberta voted in the last provincial election on March 3, critics of the government argued that the Stelmach Conservatives failed to present a clear vision for the oil-sands-driven economy.

In particular, critics said the Tories have not addressed infrastructure development, over-burdened public services and the rising cost of living.

In response to this criticism, the Alberta government produced a 20-Year Strategic Capital Plan on Jan. 29.

The plan aims to increase infrastructure investment in highways, railways, hospitals, schools and low-income housing.

“Minister of Finance Iris Evans is being very conservative with this budget, especially when you look at the assumptions made for oil, which is at $87 barrel. The price of a barrel of oil is going up at astronomical rates”, said Bill Stewart, vice president of Merit Contractor Association in Alberta.

“I think they have built some flexibility into the budget, because the forecasts are conservative on the revenue side. This will create an unbudgeted surplus, which will allow more money to be funneled into capital spending.”

In Budget 2007, the government established a policy to allocate unanticipated in-year increases in the available cash surplus.

Two-thirds of the increase was allocated to capital, with capital maintenance and renewal as the priority.

The 2008 budget plans to spend $37-billion. The Capital Plan for 2008-11 will invest $22.2 billion into the construction of roads, schools and health-care facilities.

The announced $22.2 billion is a 21 per cent increase in capital spending over last year’s three-year plan. The plan will spend an average of about $7.4 billion per year, up from an average of $2.7 billion per year from 2000 to 2007.

In a press release, the provincial government claims that Alberta’s per capita spending on infrastructure is about three times the average of other provinces.

In 2008-09, Alberta will spend more than $8.7 billion on capital projects or about $2,460 per person.

The average per capita spending on infrastructure in other provinces is about $726 per person.

“We’re continuing with major investments in infrastructure, including maintenance and renewal, at a crucial time in Alberta’s development,” said Lloyd Snelgrove, treasury board president.

“By taking care of what we have and building where we need to build, I’m confident the infrastructure backbone we are creating will provide strength to our province well into the future.”

Stewart said the government will need to address the rising cost of providing infrastructure once they go to market.

The government also recognizes this fact and has allocated $803 million to deal with cost escalation on approved projects.

The Canadian Taxpayers Federation (CTF) welcomed the decision to eliminate health-care premiums in the 2008 Budget.

“Undoubtedly, taxpayers will be pleased to see the hated health care premium eliminated ahead of schedule,” said Scott Hennig, CTF-Alberta director.

“The CTF has long campaigned for their elimination and it’s certainly satisfying to know Albertans will be saving hundreds and thousands of dollars each year starting in 2009.”

Individuals will save $528 per year and families will save $1,056.

Even Albertans whose employers pay their premium will see income tax savings due to the fact that the payment is considered a taxable benefit for the employee.

The savings from the elimination of this benefit will range from $96 to $734.

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