alberta budget 2010: striking a balance?

Alberta's 2010 provincial budget, set to be released in 2 hours, is already making headlines. While Finance Minister Ted Morton has framed it as a "give up a little" budget, an Edmonton blogger almost caught a sneak peak of the budget documents:

Low security gives blogger sneak peek at Alberta budget website (see Mack's blog for more).

Alberta Budget 2010 (updated at 9:50 p.m.)

For the second year in a row, Premier Ed Stelmach's government will run a budget deficit, this time estimated at $4.7 billion and total spending is estimated to be a record $38.7 billion. The PCs are counting on increased oilsands production to boost them out of the cycle of deficits before the 2012 election (I am sure they hope it will boost their party in the polls as well). Compared to the intense cut throat budget that many Albertans expected, this budget dealt a mixture of increases and decreases across the government. Overall, fourteen departments will be on the bitter end of cuts and eight departments will be seeing increases to their budgets in 2010.

With a 17% increase to its operating budget, Alberta's health care system is the biggest beneficiary of this budget. Alberta Health Services will also receive a one-time infusion of $759 million for debt repayment (perhaps to the Royal Bank…). Since the 2008 election, health care has been one of the toughest files for the PCs, who have felt public pressure from across the province after the dissolution of the regional health authorities and bottom-line based system reforms. If replacing the blunt and controversial Minister Ron Liepert with the more gentler Minister Gene Zwozdesky was a first major step in the government's health care public relations shift, this budget increase and debt repayment could be the second most substantial. The challenge will be to turn these budget increases into positive changes on the ground level.

The Municipal Affairs and Infrastructure budgets were also substantially increased, due to what I imagine to be the result of strong lobbying efforts by the AUMA and AAMDC.

Perhaps a statement on the level of political capital that Culture & Community Spirit Minister Lindsay Blackett has left after the Bill 44 controversy, that Ministry will reduce operating expenses by 15%. Among other cuts, Advanced Education & Technology will face a 6% budget decrease to program expenses after being on the better end of budget increases over the past five years. Changes to the student finance section of the Advanced Education budget include decreases to student scholarships by $3 million and grants by $51 million, and increases to student loans by (ie: increased student debt).

Individual department business plans give more detail on income and expenses across the government ministries.

When Liberal leader David Swann criticized the budget and the PCs for not "responsibly managing the public purse," it may have sounded like a predictable opposition response, but it raises some important points about recent government budgets and the provincial government's large dependance on natural resource revenues for income. Alberta is a resource-based economy, but the budget turbulence in recent years highlights why Albertans should be concerned about the lack of economic diversification in our province.

Wildrose Alliance leader Danielle Smith (who will be releasing her party's alternative budget tomorrow) criticized the budget and Finance & Enterprise Minister Ted Morton's credentials as a true fiscal conservative, but this budget is just another step in Minister Morton's public moderation. Since the 2006 PC leadership race, Minister Morton has transformed his public image as the great right-wing fire-wall lighter to a competent and softer governor. This budget includes both cuts and increases, striking a kind of political balance. This was Minister Morton's first budget and if he is able to survive his tenure in the Finance portfolio, he could be well positioned to be the leading candidate in the next PC leadership race.