Get ready to dig deeper, Alberta’s government wants a lot more of your money to help cover its plunge in oil revenue.
New revenue measures include a health levy, an increase to income taxes for people making over $100,000, a four-cent increase to fuel taxes, new sin taxes and even a 35 per cent hike to traffic tickets.
Charitable contribution tax credits are being cut. Insurance premium taxes are going up. But corporate income tax rates weren’t altered at all.
The provincial government unveiled a swath of new or increased user fees in Thursday’s budget presentation. Everything from birth to death certificates cost more.
The new revenue is meant to help offset what the Progressive Conservative government calls a $7-billion hole caused by falling oil revenues.
Overall, the government is hoping to get $1.5-billion in new revenue this year, the budget documents say, and about $2.7-billion by the 2019-20 fiscal year.
The provincial budget document is filled with dire warnings about low oil prices and slow growth. To plug the hole, the government’s taking a patchwork approach of increasing revenue, cutting expenses in a number of departments and withdrawing about $4-billion from the province’s contingency funds.
The 2015-16 fiscal year’s deficit is forecasted to be just under $5-billion, with a smaller, $3-billion deficit projected next year, and a return to surpluses predicted after that.
The government also plans to borrow to help pay for its five-year capital-plan, starting with direct borrowing of $5.68-billion this year, for an estimated total of $19.2-billion over the next five years.
Finance minister Robin Campbell said during a press conference on Thursday that with real GDP forecast to only grow 0.4 per cent in 2015, it won’t be a recession – but it will feel like one.
The equivalent of more than 2,000 positions are to be shed from the provincial roster, mostly through attrition though layoffs seem inevitable for some in the education and health departments.
City officials weren’t too worried about this year’s grant funding, shored up by a late influx of cash announced earlier in March.
But both Mayor Nolan Crouse and city manager Patrick Draper wondered about the impacts all the new fees and taxes could have on the residents.
“I think we must always be concerned about the burden of the budget on St. Albertans, on all St. Albertans, because the effect of taxation and cost of living will be felt by many,” Crouse said. He pointed out there’s some relief, with the health levy not applicable to those making under $50,000 and new Alberta Working Family Supplement for lower income families.
“My main concern for the budget is actually for our residents,” Draper said, noting there’s some potential job losses coming. “There is some cause for concern because they are talking about some fairly large numbers.”
The affluent community of St. Albert could see residents impacted with the higher end of the health levy and the new income tax measures, which will be increased to 11.5 per cent over the next three years for those with incomes over $100,000.
Draper said the new taxes and fees could mean some less disposable income for residents. He’s not sure if it will have an impact on consumer spending in St. Albert.
While funding for municipalities seems to have mostly stayed flat, the numbers are still being crunched on the impact of increased traffic fines – municipalities get a cut – and the new fuel costs.
The library and the municipal policing grant should benefit slightly from the budget.
“The real acid test is going to be what’s flat in 2016,” Crouse said.
St. Albert MLA Stephen Khan acknowledged that like many Albertans, he’d filled up his car and bought a case of beer before the new taxes and fees were implemented.
He called the budget “challenging.”
“It’s certainly one of the more difficult budgets that Albertans have seen in the last number of years, probably the most challenging budget since 1993 in terms of tax increases and some of the ways the province has approached raising revenues,” Khan said.
He said the budget is a reflection of what he heard in St. Albert when he held a budget discussion event.
“I think people in St. Albert understand that things have to change,” Khan said. “I think people are tired of being in that (boom and bust) cycle.”
Asked about the cuts to education, he pointed out that there are no cuts to the number of teachers. He acknowledged bigger class sizes, the possible result of no increases to accommodate a growing population, are a concern for everybody.
The alternative to all the new fees and taxes was massive cuts or depleting Alberta’s heritage fund, Khan said. He also pointed to increased supports for lower-income families.
Alberta’s taxes will remain the lowest across Canada, he said.