Health care spending increases sharply

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Several other departments facing cuts

The province will run a $4.7-billion deficit in the next fiscal year.

Some departments will have funding cut while others will see increases. Overall, the government will spend $1.6 billion more than the current year, while revenue is projected to increase by $423 million.

Of the 24 ministries, 14 will see cuts. The most significant cuts are 28.6 per cent to Treasury Board, 18.6 per cent in Housing and Urban Affairs, 17.1 per cent in Transportation and 15 per cent in Culture and Community Spirit.

Sustainable Resource Development and Tourism, Parks and Recreation will both be cut about 12 per cent.

Health and Wellness will get a 15 per cent boost and Energy will increase 12 per cent. Education gets a 0.7 per cent overall increase.

“These are difficult times and difficult times call for difficult choices,” said Finance Minister Ted Morton.

“A lot of people want to have it both ways, stay out of deficit and don’t make cuts to health care and education. You can’t have it both ways. We’ve chosen to make cuts in some areas and increase spending in others to protect essential services.”

The government will spend $7.2 billion this year on previous capital commitments.

Health care

With Tuesday’s budget, the province will pay off a $542 million deficit accrued by Alberta Health Services (AHS) this year and $719 million for the projected deficit in the coming year.

A new five-year funding agreement will also see AHS get a six per cent increase in operating funding this year, bringing its funding level to nearly $9 billion. Six per cent increases will follow in each of the next two years followed by two years of 4.5 per cent increases.

This move is designed to bump up the base level of health care funding, and then provide sustainable and predictable funding in the coming years. This should help all departments, since health care’s “insatiable appetite for funding” creates ripple effects felt across government, said Treasury Board President Lloyd Snelgrove.

The government found $1.3 billion in savings across its various ministries in the last year and is using the money to increase health care funding.

“By providing [Health] significant long-term funding, we believe all government will be able to do the work they need to do without being overly concerned about health eating their lunch,” he said.

All three opposition parties seized on health care spending.

“They’re adding another 15 per cent on the budget to deal with their mismanagement over the past year that garnered a $1.2-billion deficit. They’re simply covering their asses,” said Alberta Liberal leader David Swann.

NDP leader Brian Mason compared Tory budgeting to a fire brigade trying to put out fires they’ve created themselves.

“This year the big fire they’re trying to put out is health care,” he said.

“You’re not going to fix health care by throwing more money at it,” said Wildrose Alliance leader Danielle Smith.

Layoffs coming

There will be layoffs in the government ranks, with as many as 250 people losing their jobs. Officials are working to minimize layoffs by reassigning as many people as possible to departments with openings. The layoffs will happen across departments and will include both union and non-union employees.

Morton admitted the budget was contentious in the Tory caucus.

“There’s not a single person in caucus that agrees with everything in this budget, including the premier,” he said.

Two departments will see huge increases in program spending. Infrastructure sees its program spending increase 83 per cent due to an internal change that will see budgeting of health facility building and improvements move to the department of Infrastructure.

Municipal Affairs will see its spending increase 69 per cent due to a large increase in its Municipal Sustainability Initiative program.

Funding for Persons With Developmental Disabilities (PDD) remains unchanged from last year.

The government expects a smaller deficit of $1.1 billion next year and a modest surplus of $505 million the year after. It will use its Sustainability Fund to offset the deficits. The $15-billion fund is projected to be worth $2.8 billion by the end of 2013.

The government will continue to look for efficiencies as the year progresses, Morton said.

2010 budget, impact by ministry

Ministry % change

Aboriginal Relations +2.1

Advanced Education and Technology -6

Agriculture and Rural Development -7.5

Children and Youth Services -3.1

Culture and Community Spirit -15

Education +0.7

Employment and Immigration -7.3

Energy +12.3

Environment -5.4

Executive Council -10.3

Finance and Enterprise +8.2

Health and Wellness +15

Housing and Urban Affairs -18.6

Infrastructure +83

International and Intergovernmental Relations -7.7

Justice +2.5

Municipal Affairs +69

Seniors and Community Supports +2.2

Service Alberta -7.5

Solicitor General and Public Security +2.2

Sustainable Resource Development -12.1

Tourism, Parks and Recreation -12.4

Transportation -17.1

Treasury Board -28.6

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