What you need to know about the 2016 Alberta budget
From the details of the carbon tax to how much we raked in lottery and gaming revenue we've got a progressive roundup of the budget
The budget dropped today. You're no doubt seeing a stream of budget related stories. Here's what you need to know.
Yes Martha, we're still on the resource revenue rollercoaster
If you were expecting a Corey Hogan style, damn the torpedoes budget well, you'll be disappointed. Our provincial budget is still largely tied to resource revenues and we still refuse to use the revenue tools available to us.
We're still on the resource royalty rollercoaster and we are just not raising enough revenue. in 2016-17 non-renewable resource revenue accounts for 3.3 per cent of total revenue but that's only because of crappy prices. That ratio is expected to grow to 8.5 per cent by 2018-19.
Carbon tax details
The carbon tax was announced in November as part of the province's progressive and groundbreaking climate plan and now we have details on what it looks like.
The tax comes into effect the first day of Jan. 2017 and together we'll pay an additional 4.5 cents per litre of gasoline, 5.35 cents for diesel and a shade over a dollar of gigajoule for natural gas. The costs increase the next year by a touch and then stay put until the economy improves and other jurisdictions follow suit. As recognition of the cost and effect this would have on lower and middle income families there is a rebate program that covers 60 per cent of households.
When all of the carbon tax policy is at full strength it is expected to raise $2.4 billion for the 2018-2019 fiscal year.
Now we know how it works, how much it's expected to raise and who gets the rebate but the details on how it's going to be spent (beyond the rebates) are still to be determined. We'll be keeping track of that. The carbon tax also allowed the government to cut the small business tax rate from 3 per cent to 2 per cent. This is expected to save small business folks about $185 million. It's a bit of a sop to the right wing business lobby but at least its effect is fairly minimal on the treasury.
All in all the carbon tax looks like a competently done piece of policy.
Biggest social program in a generation
These measures come into effect over the summer and more than 380,000 children will be helped by these programs. Low income families that make under $41,220 a year will receive quarterly payments. The government is putting money directly in the hands of poor families, an approach that makes a ton of sense. There is a growing school of thought that posits that giving money to people who need it without conditions or programs could be one of the most effective poverty alleviation strategies out there.
On the Alberta Family Employment Tax Credit side, while I'm no fan of boutique tax credits if the province is going to go down this route I'm glad it's to help poorer families.
Combined these two policies are unequivocally a good news story and something I'm happy to see the government invest in.
Energy efficiency in Alberta, finally!
Jesse Row is the executive director of the Alberta Energy Efficiency Alliance and like Lucy with the football the province had promised over and over again they would put in an energy efficiency program only to yank it away at the last moment. There was always some reason, usually related to the instability of the leadership of the PC party.
But here we are, the province is planning to spend $645 million over five years on the program and it will be done through a new third party agency called Energy Efficiency Alberta. We're talking about education, energy audits and incentives to encourage people and companies to spend on energy efficiency. Investing in energy efficiency is a no-brainer and it's a shame it took this long to get started.
Some money for affordable housing
There is $148 million earmarked for new affordable housing over the next five years. There is also a one time $13 million line item for new housing for homeless and specialized populations. I would have liked to have seen far more.
Renewable energy and coal phaseout details
Some dribs and drabs came out on renewable energy and coal phaseout but there were no big announcements on this file.
There is $195 million budgeted over the next five years for communities affected by the phaseout of coal but no specifics on what that's going to look like
There was also a rough timeline on the renewable energy plan. The structure of the plan should be be done by late 2016 and they're expecting renewable energy projects to be producing electricity by 2019.
Liquor and gaming dollars
I check on this every year, mostly out of morbid curiosity. Roughly five per cent of our budget comes from liquor and gaming, $2.6 billion.