Yesterday, the Government of Alberta released their budget for the 2015-16 fiscal year. This is the first budget following the steep fall in oil prices and as a consequence, many areas relevant to AAMDC members have seen a reduction or freeze in spending.

In addition to the budget, the Government of Alberta introduced a ten-year financial plan intended to provide a long term vision of the province’s financial future. This plan is designed to reduce the government’s program delivery budget’s reliance on energy revenues so that in 2019-20, only 50% of energy revenues will go towards government programs.

The following are details of the 2015-16 budget that will be important for AAMDC members:

• In an effort to manage revenue volatility in an economy reliant on natural resource revenues, the provincial government is implementing a number of changes to the Alberta government’s revenue structure. This will mean a higher proportion of funding for programs and services will come from taxes and user fees.
• Several taxation changes have been introduced in the 2015 budget, including a Health Care Contribution Levy for individuals with taxable income above $50,000, a progressive personal income tax, a four cent increase on the provincial fuel tax, an increase on the provincial tobacco tax, a reduction in the Charitable Donations Tax Credit, an increase in the provincial Insurance Premiums Tax, and a return to determining the Education Property Tax requisition on an annual basis, as was the practice prior to 2013-14.
• One tax credit has been enhanced and one has been newly introduced. The Alberta Family Employment Tax Credit has been enhanced to provide greater benefits to low and middle income families. The new Alberta Working Family Supplement will provide a refund to working families earning between $2,760 and $41,222.
• The government has continued to zero-fund the Strategic Transportation Infrastructure Program, which includes the Local Road Bridge Program and the Resource Road Program. Despite this, it remains a line-item, indicating a possible return in the future. The AAMDC has spent considerable effort advocating on behalf of members for stable, sufficient bridge funding and will continue to do so.
• Alberta Community Partnership funding has decreased by 18% to $40 million for 2015.
• Funding for the Affordable Supportive Living Initiative increased by 83%, and is being funded at $91.5 million in 2015.

• The Municipal Sustainability Initiative (MSI) has been funded at approximately $870 million for 2015-16. This includes $497 million in MSI capital funding, $30 million in MSI operating funding, and approximately $353 million in Basic Municipal Transportation Grant (BMTG) funding, which was transferred from Alberta Transportation to Alberta Municipal Affairs in 2014. BMTG funding is allocated differently for different types of municipalities. Rural municipalities receive their share based on a formula that takes into account kilometers of open road, population, and equalized assessment among other criteria. In addition to the budgeted MSI funding, the Government of Alberta provided $400 million in additional funding in the fourth quarter of the 2014-15 fiscal year, which in effect covers the difference in the MSI reduction in the 2015-16 budget.

The attached backgrounder provides more budget highlights that may affect rural Alberta. The AAMDC will provide additional details through member bulletins as they become available. To view the complete budget and its supporting documents, please click here.

Enquiries may be directed to:

Gerald Rhodes Executive Director 780.955.4077

Kim Heyman Director of Advocacy and Communications 780.955.4079

 

BACKGROUNDER: AAMDC Budget 2015 Details

PROVINCIAL FINANCES   

• The provincial government is expected to have a $5 billion deficit in the 2015-16 fiscal year. This shortfall will be covered with funding from Alberta’s contingency account.
• Alberta’s revenues are expected to decrease by $5.5 billion to $43.3 billion
• Total expenditures will see a $400 million reduction to $48.4 billion
• Alberta’s natural resource revenues are expected to drop by nearly $6 billion to $2.8 billion.
• Personal Income Tax is expected to bring in $11.7 billion in revenue while Corporate Income Tax is expected to bring in $4.5 billion.
• Revenue collected through fees and licenses will increase by over $300 million compared to the previous year.
• Revenue from Alberta’s fuel tax is forecasted to raise over $500 million compared to 2014-15.
• Total education property tax revenue for 2015-16 is forecasted at $2.25 billion, an increase from $2.1 billion in the previous year.

ABORIGINAL RELATIONS

• The Aboriginal Consultation Office will receive $15.8 million in funding.

AGRICULTURE

• Agriculture Income Support has decreased by 10% to $128 million
• The Government of Alberta will be implementing the recommendations of the Rural Economic Development Action Plan (REDAP) although it is unclear whether the funding exists to support these recommendations.
• The budget for Crop, Hail and Livestock Insurance has increased by 4% to $477 million in the 2015-16 budget.
• Funding to compensate damage to crops and livestock as a result of wildlife remains the same as the 2014-15 budget.
• The Livestock and Meat Strategy will see a 13% decrease in funding from $37.1 million in 2014-15 to $32.3 million in 2015-16.
• Funding for Agricultural Services Boards and Agricultural Societies remains the same as the previous year

COMMUNITY ISSUES

• Alberta Justice and Solicitor General has made it a priority initiative to review and revise the Law Enforcement Framework to respond to changing issues and needs.
• The provincial government will be collaborating with municipalities and other relevant stakeholders to develop a mental health and addiction policy to encourage healthy and safe communities.
• Alberta First Responders Radio Communication System funding has been reduced by approximately 51% to $64 million. This may be an indication that the project is nearing completion.
• Funding for Alberta’s Final Mile Rural Broadband Initiative will see a reduction in funding by over $2.1 million to a total of $4.3 million.
• Family and Community Support Services will be funded at the same level as the two previous budgets at $76 million.
• The budget for the operation of provincial parks is increased by 26% to over $50 million.
• The 2015 Community Initiatives Program budget saw a 4.5% decrease from the previous year.
• Library funding will be increased to $36 million
• Alberta will retain the same number of police, provincial court judges, prosecutors, and sheriffs.
• The Policing Assistance to Municipalities Grant (MPAG) saw a small increase in funding from $83.4 million to $84.6 million.
• The provincial government will be developing a new provincial housing strategy to assist in affordable housing.
• Effective July 1, 2015, fees for the use of registry services will rise, including services related to acquiring motor vehicle, land title, mortgage and vital statistics documents.
• The funding provided to assist in the hiring of new police officers is maintained at $30 million.

EDUCATION

• The Small Schools by Necessity Grant will see a reduction of nearly 10% to $53 million.
• Student Transportation Services funding will see a modest increase to approximately $287 million
• Over the next five years, the government plans to spend $5 billion on schools with $4.1 billion of that funding going towards the construction of new schools.

ENERGY

• The Orphan Well Abandonment Program Funding will be nearly doubled to over $30 million.
• Bioenergy Initiatives will see a 13% decrease in funding

ENVIRONMENT

• As the development of regional plans under the Land-use Framework continue, the budget for the Land Use Secretariat has been increased substantially to just over $30 million in the 2015 budget.
• The budget for forest management has increased significantly, from approximately $21 million to $60 million. This is likely in part due to ESRD’s strategic initiative to develop and implement an Alberta Forest Strategy to provide long-term resource management and land use planning for Alberta’s forests.

HEALTH & SENIORS

• The overall Alberta Health Services budget increased by 1.2% with the base operating grant being funded at approximately $10.86 billion.
• Funding for the Affordable Supportive Living Initiative increased by 83%, and is being funded at $91.5 million in 2015.
• Special needs assistances and project grants have been reduced to approximately $24 million in 2015.
• The Seniors Property Tax Deferral Program is unchanged from the previous year.

MUNICIPAL AFFAIRS

• Municipal Sustainability Initiative (MSI) funding is set at approximately $880 million. This includes $497 million in MSI capital funding, $30 million in MSI operating funding, and approximately $353 million in Basic Municipal Transportation Grant (BMTG) funding, which was transferred from Alberta Transportation to Alberta Municipal Affairs in 2014. BMTG funding is allocated differently for different types of municipalities. Rural municipalities receive their share based on a formula that takes into account kilometers of open road, population, and equalized assessment. In addition to the budgeted funding, the Government of Alberta provided an extra $400 million in funding in the fourth quarter of the 2014-15 fiscal year, which in effect covers the difference in the MSI reduction in the 2015-16 budget.

• Alberta Community Partnership funding has decreased by 18% to $40 million for 2015
• Support for the ongoing municipal recovery efforts in response to the 2013 floods has been allotted a total of approximately $25 million. Alberta Municipal Affairs will work with federal, provincial and municipal governments to improve province-wide all-hazard mitigation programs, which will include continued investments in flood mitigation and erosion control.
• The Ministry’s business plan identifies the continued goal of supporting municipal efforts to maximize regional efficiencies through inter-municipal collaboration and partnerships.

TRANSPORTATION

• The Strategic Transportation Infrastructure Program, which includes the Resource Road Program and the Local Road Bridge Program, continues to be zero-funded for the third consecutive budget cycle. It does remain a line-item in the budget, indicating a possibility of returning in the future.
• The Federal Gas Tax Fund has remained steady at approximately $209 million
• Water for Life capital funding has decreased significantly, and will be funded at a level of $30 million in 2015.  Water for Life operational funding was zero-funded this year
• The Alberta Municipal Water/Wastewater Partnership has remained unchanged from the previous year, and will be funded at $25 million in 2015-16.
• GreenTRIP funding has decreased by 25%, to a level of $185 million
• Alberta Transportation’s business plan identifies the need to develop policies and implementation strategies to enable regional transportation services and support rural transit strategies as a key strategic initiative.