Mirror, Mirror

 

It would all be kind of entertaining if the stakes weren’t so high.

On February 29^th, Danielle Smith’s UCP government issued a provincial budget straight out of the Ralph Klein playbook.

In our response to Premier Smith’s cozy “fireside” chat (a.k.a. the pre-budget address) about the eternal unsustainability of Alberta’s boom-bust resource-based economic cycle, we noted the uncanny similarities to past proclamations of fiscal restraint.

The ghostly resonances were obvious to many political observers as well. And while the budget that has been handed down is not one of “brutal cuts” or “massive cuts,” it certainly had more than a whiff of the infamous admonition that Albertans should “look in the mirror” to find the culprits for past mistakes. Conservative-leaning opinion columnists parroted the finance minister’s warning that Albertans should no longer expect “champagne services on a beer budget” — a framing that even left-of-centre pundits left unchallenged.

What kind of Alberta are we hoping to build then? And is it one made possible by this budget? (How) will we be able to meet the immediate and long-term needs of a rapidly growing province, in a rapidly changing political, economic, and environmental context? When we look in the mirror, what Alberta do we see?

Budget 2024 promises “a responsible plan for a growing Alberta.”

Let’s break down that apparently bland and superficial tagline.

 

A responsible (?) plan for a growing Alberta

Budget 2024 deliberately underfunds and ignores looming and imminent crises in housing, education, and health-care workforce.

Inflation sits at 3.1%, but the cumulative impact of the last few years' record highs, compounded by high grocery, housing, and energy prices means the average 4% spending increase across government departments doesn’t compensate for rising costs or rising demand, let alone the 4.4% increase in population.

This budget underscores the current government’s penchant for undermining renewables — a short-sighted approach that diminishes long-term possibilities and erodes an important source of revenues for municipalities ($28 million in 2023, along with nearly $300 million windfall to the provincial coffers last year).

To top it off, Budget 2024 sinks more money into privatization, which has been repeatedly demonstrated to cost more while delivering worse services (DynaLife asset buyback: $31 million; ASI: $313 million; baseless AHS restructuring: $85 million).

 

A responsible plan (?) for a growing Alberta

Nearly a decade ago, we noted that Budget Day in Alberta was beginning to feel a lot like Groundhog Day. The self-professed plans of the past — Klein Plan, Prentice Plan, Notley Plan, Kenney Plan — didn’t really attempt to get off the rollercoaster. Neither does this one.  

Ralph Klein himself set the parameters of failure in a 2006 open letter to Albertans when he cautioned that, “If we do not save a sufficient portion of these oil and gas revenues, history proves that much of it will be dissipated on non-essential expenditures and we will not have much to show for it 10 years or so from now.” Non-essential expenditures like Ralph Bucks or Danielle Dollars surely couldn’t be the lynchpin of this new blueprint for fiscal responsibility?

For Prentice, “getting off the royalty rollercoaster” meant across-the-board cuts to program spending while strenuously avoiding the question of deviating from Alberta’s “low tax, no sales tax” shibboleth and also raising every possible fee, levy, or premium. At that time, the leaders of every opposition party in the legislature had a better “plan” to offer: then-leader of the Wildrose Party, Danielle Smith prophesied, “This is the kind of problem that we’ve had with this government all along. They always hope on oil and gas prices to bail them out of their problems and I think this time they’re going to be in for some trouble on that.” Unsurprisingly, her plan to rebuild the Heritage Trust equally relies on squeezing every last drop from the ground before time is called on the fossil fuel bonanza.

 NDP leader Rachel Notley said Prentice’s government needed to talk about stabilizing revenues, but when faced with the 2015 resource revenue crisis, Notley’s own government relied on hiring freezes, issuing zero-increase contracts to thousands of public sector workers, and “bending the cost curve” by reducing program spending less drastically than her predecessors. Reducing the province’s dependence on the “royalty rollercoaster” was shifted to a more distant, gradual priority. By the May 2023 provincial election, Notley was fully on board with eliminating deficit budgets altogether.

In 2020, Jason Kenney likewise cautioned Albertans about the "fiscal reckoning" to come; but as economist Trevor Tombe notes, his government seems to have made those problems worse rather than solving them.

Smith’s so-called plan is certainly not new, and comes close to the old adage about trying the same thing again and again and expecting different results.

 

A responsible plan for a growing (?) Alberta

The aforementioned 4.4% population growth across the province has been concentrated in Calgary (with 59,000 additional residents in the last two years) and Edmonton (which gained the equivalent of the population of Red Deer between 2021 and 2023 — a 10% increase).

This rapid growth has ripple effects on every aspect of service delivery and space, ratcheting up pressure on:

Education: Budget 2024 will fund up to 3,100 new teaching and EA positions — but the Alberta Teachers’ Association has calculated that nearly 6,000 are needed to reduce class sizes to recommended levels and to address spiralling classroom complexity. Budget 2024 allocates $2.1 billion for capital projects for schools — but much of that is for design and planning rather than new schools funded through completion (shovels in the ground, bums in seats). Instead, the budget offers $103 million towards modular classrooms to ease those growth pressures — an experience this author remembers vividly from the Klein years. For Edmonton, in particular, promised new schools will come too little and too late as the public school division is adding new students at an exponential rate that far outpaces the additional spaces. As the division tries to balance its own budget to do more with less, its 10-year plan predicts increasing pressures on alternative programs for students with specialized learning needs.

Post-secondary: While implementing a 2% cap on tuition increases, Budget 2024 provides no funding for domestic enrollment growth, or to address an ever-growing infrastructure and maintenance deficit. The cost of deferred maintenance at the University of Alberta alone is set to hit over $1 billion in 2028. Budget 2024 instead offers a 14% cut to capital funding for post-secondary institutions between 2023-24 and 2025-26 before partially restoring funding to just below 2023 levels in 2026-27.

Health-care infrastructure: While final designs have been released for much-need upgrades to Red Deer Regional Hospital, the long-promised and delayed South Edmonton hospital has now dropped off the map. Despite a doubling in population, there has been no new hospital for Edmonton since 1988. The $400 million sunk into the South Edmonton hospital design and planning is deemed insignificant, bed shortfall — without the South Edmonton hospital, the Edmonton zone alone will be short nearly 1,500 beds by 2026 (when the new facility would have been opened).

Seniors’ care: The government’s plan to “free up” hospital bed space rests on investing up to $650 million that will be spent to create 1,600 continuing care spaces — even as the province seeks to sell its publicly owned seniors’ care infrastructure and fund private firms to construct them instead. The Alberta Continuing Care Association estimates a need for a further 10,000 spaces in the next five years. The ability to meet demand will also rely on shifting seniors’ care away from continuing care facilities to home- and community-based care. While those services have seen increases in this budget, those increases become steadily smaller over subsequent years.

The family doctor crisis: As approximately 1 in 6 Albertans are without a family doctor, 60% of family physicians in the province are considering leaving their practice. So far, efforts at recruitment and retention by the province have yet to correct that course in any significant way.

Housing: Demand for affordable housing similarly outstrips supply. The UCP government has boasted about the success of its “Alberta is Calling” campaign, which has explicitly and deliberately created these conditions; now it has no response to the wildly increased demand.

 

A responsible plan for a growing Alberta (?)

What “Alberta” are we talking about here? Who is this budget really for? Is this a budget that was crafted with every Albertan in mind? Read alongside the Smith government’s recent moves to further marginalize 2SLGBTQIA folks, teachers, and medical professionals, ruling out participation in the national pharmacare program, continued emphasis on dismantling AHS — this is a budget that bolsters a very partial agenda for a select group of people. The kind of people who perhaps like to take back what was intended for everyone in the first place.

Meanwhile, the government’s “Alberta is Calling” redux offers a $5,000 skilled trades tax incentive but no coherent or concerted provincial workforce strategy for health care, which has higher vacancies (job postings are up 16% to trades’ 13%, for example). A similar substantial investment in health care and social care jobs would generate a greater, and more intersectional economic impact.

Money going to private education and private health care — a total of $313 million between funding for the Alberta Surgical Initiative, private schools, and colleges — means a plan that prioritizes private profit, not Albertans' best interests.

While a half-step above the one put forward by Jim Prentice in 2015, this is a budget that flatlines public spending without hope of keeping up with population growth and inflation; that doesn’t attempt to backfill the holes in services or infrastructure left by previous “responsible plans”; that raises whatever fees and taxes they can get away with; and offers no real plan for sustainable revenue.

 

Austerity: No joy to be had in being right

In our pre-budget foreshadowing, we also flagged the announcement of indefinite austerity. In her February 21 address to Albertans, Premier Smith stated: “I have instructed our finance minister to limit government spending to below the legislated rate cap of inflation plus population growth…not just during lean years with lower oil prices as we expect next year…but also in years when high oil and natural gas prices result in billions of surplus provincial dollars.”

That’s exactly what this budget has delivered, locking in a future of always scrambling and never quite keeping up with the growing challenges in our province.

At this point, there’s no smug joy to be had in being right — it’s just so predictable, unnecessary, and exhausting to see Alberta’s financial future so deeply stuck in the ruts of the past.

Finance Minister Nate Horner disputes this, asserting, “I certainly would not call this an austerity budget. We’ve taken the time to prioritize health and education.” But that’s not what austerity means. Either Horner is poorly educated or disingenuous, seeking to shift the meaning of the word to disguise the true nature of his budget.

And, really: Has the government prioritized health and education? Despite boasting about “record” highs being allocated in this budget, when we break down the numbers, we don’t see a consistent investment to meet current and future needs. The reality is some modest increases in 2024-25, marginal ones in 2025-26, and non-existent ones or cuts in 2026-27. The Alberta Teachers’ Association estimates that per-student funding — already the lowest in Canada — would need to increase by 13% just to hit the national average.

What is being “prioritized” in those two sectors?  Private profit — not workers, students, or patients. Funding for charter and private for-profit schools increased by 13.5%, while public schools received a 4.4% increase in 2024-25. “Accredited private schools and early childhood service providers” have received a 29% budget increase since 2022-23. The Alberta Surgical Initiative (ASI), which has been thoroughly debunked as a model to reduce surgical wait times, and which has actively funnelled public dollars away from public operating rooms, will receive a further $313 million to contract out a record number of surgical procedures to for-profit chartered facilities. AHS restructuring, which has not been supported by any evidence of effectiveness nor any plan to mitigate impacts to health-care providers and patients, will cost $85 million over the next two years. What extent of the transformation this will fund has not been disclosed to Albertans.

 

Not even catching up

The increases that we do see do not adequately compensate for years of underinvestment and outright cuts to programs and staff. One of the most tangible examples is the Program Unit Funding (PUF), which supports early learning interventions for children with specialized needs. In 2020, PUF was dramatically cut, eligibility was narrowed, and reduced funding moved around in a complex game of accounting hide-and-seek that left many school divisions scrambling to provide for increasing numbers of students while having to close dozens of centres. In Edmonton Public alone, funding dropped from $39 million to $9.5 million. The board was then funded $13 million to provide similar services for kindergarten students who had just been removed from the program — leaving EPSB with a $16.5 million hole. In Budget 2024, the provincial government boasts that it is increasing PUF by $26 million — over the next three years. That amounts to a mere 2% increase in 2024-25, and an average 4.6% in the following two school years. This new funding “boost” barely covers the amount cut in a single school division.

 

Meanwhile public post-secondary institutions have seen per student funding drop to historic lows while the provincial share of their funding has also been reduced. In health and seniors’ care, nurses and health-care aides have yet to fully recover from the devastating impacts of the COVID-19 pandemic — yet not only this budget does not including funding to recruit and retain at the levels required but also AHS has implemented hiring freezes. Alberta’s medical laboratory services are still in limbo waiting for some kind of long-term plan following the cancellation of the DynaLIFE contract. Even with that uncertainty compounding staff shortages due to pandemic burnout and demographic shifts, the entire medical diagnostic system will see only an average of 2% annual increase over the next three years.

Last and most certainly not least, this budget does not acknowledge the realities of public sector compensation. It budgets for 4% increases, which means labour action is more than possible — as we’ve just seen in Edmonton with CSU 52, and nationally with civil service and health-care union FSSS-CSN in Quebec. Moreover, in time-honoured Alberta tradition, Budget 2024 downloads the burden of austerity budgeting onto municipalities - and ultimately onto public sector workers and their families.

 

Who’s the Fairest?

Nearly a decade ago, when an Alberta premier helpfully told us to collectively look in the mirror before handing down a very similar budget, Albertans told his government — including newly-minted PC MLA Danielle Smith — where to go and how to get there. In the two weeks since this most recent iteration was pulled from the playbook, Albertans have mostly grumbled but gone about their daily battles. They’re seemingly busy getting ready for hour-long bus rides to overcrowded schools, booking private speech therapy appointments, waiting outside the walk-in clinic from 8 a.m. to try to secure one of the day’s open appointments, viewing yet another unaffordable apartment, sitting beside an elderly loved one who cannot be discharged from hospital without a long-term care space, designing picket signs as they prepare to strike for livable wages. Why are we seemingly resigned to accepting a budget with the same parameters that have twice provoked us to province-wide rebellion?