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Highlights
and
Accountability Statement
March
24, 2004
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Heading
Toward Alberta’s Second Century
TWENTY-YEAR
STRATEGIC PLAN
-
Budget 2004 outlines a vision of Alberta’s
second century and a twenty-year strategic plan to achieve
that vision. The strategic plan is based on four key opportunities
or pillars:
-
unleashing innovation,
- leading
in learning,
- competing
in the global marketplace, and
- making
Alberta the best place to live, work and visit.
-
Many of the building blocks for achieving our vision have
been put in place over the last decade. More will be added
with this year’s budget. Budget 2004 will:
-
increase funding for health and education,
- address
infrastructure requirements with a $6.5 billion three-year
Capital Plan,
- enhance
the Alberta Advantage by reducing corporate income tax
rates, encouraging innovation, improving the quality of
life of Albertans and strengthening communities, and
- bring
Alberta within striking distance of eliminating accumulated
debt.
FISCAL
PLAN
- The
budget will be balanced every year, as required by the Fiscal
Responsibility Act. The Contingency Allowance available
for in-year initiatives averages just under $270 million for
the next three years.
- Accumulated
debt will be reduced by $1 billion to $2.7 billion by the
end of 2005-06. Since 1993-94, accumulated debt will have
been cut by $20 billion or nearly 90%, saving $1.4 billion
a year in debt servicing costs.
- Sustainability
Fund assets will be maintained at $2.5 billion to protect
against short-term revenue declines and other unforeseen events.
- Over
the next two years, $706 million will be added to the Capital
Account, bringing total allocations to $2.5 billion since
2002-03. These funds are being used to pay for Capital Plan
projects.
- Revenue
is estimated at $23 billion and expense at $22.6 billion in
2004-05. Program expense will increase by $555 million, or
2.6%. No funding has been budgeted for emergency and disaster
assistance or natural gas rebates in 2004-05.
ECONOMIC
OUTLOOK AND ASSUMPTIONS
- Alberta’s
economic growth is expected to increase to 3.6% in 2004 and
average 3.1% over the medium term. 42,700 new jobs are expected
in 2004 and a further 112,200 jobs over the following three
years.
-
Energy prices are assumed to decline:
-
Natural gas prices – Cdn$4.20 per thousand cubic
feet in 2004-05 and Cdn$4.01 by 2006-07.
- Oil
prices – US$26 per barrel in 2004-05 and US$25 for
the following two years.
-
The U.S./Canada exchange rate is assumed to average 77 cents
for the next three years
BUDGET
2004 PRIORITIES
ENHANCING
ALBERTA’S TAX AND ECONOMIC ADVANTAGES
-
Indexing of Alberta’s 10% single-rate personal income
tax system against inflation will continue in 2004, saving
Albertans about $150 million.
- On
April 1, the general corporate income tax rate will be cut
from 12.5% to 11.5% and the small business rate will be cut
from 4% to 3%, saving Alberta businesses $142 million.
- School
property tax rates will be cut by about 2.3% in 2004, saving
Albertans and Alberta businesses about $20 million.
- There
are no changes to other tax rates, health care insurance premiums
or major fees. Alberta will remain the only province with
no general retail sales tax.
- New
initiatives will be undertaken to promote innovation and economic
opportunities. Continued support will be provided to the agriculture
sector.
PROGRAM
PRIORITIES
-
Learning’s program spending will increase by $284 million,
or 5.7%, to $5.3 billion in 2004-05. Increased funding for
school boards will give them the flexibility to address supported
Learning Commission recommendations. Access to post-secondary
education will improve
- Health
and Wellness program spending will increase by $618 million,
or 8.4%, to $8 billion in 2004-05. Spending on health programs
has more than doubled over the last nine years and will continue
to account for the largest share of total government spending.
Actions are required to make the Alberta health system sustainable.
- Program
spending will also increase for policing, seniors, children’s
services and other priorities.
CAPITAL
PLAN PRIORITIES
-
The 2004-07 Capital Plan will support $6.5 billion of capital
projects over the next three years, an increase of about $900
million from the 2003-06 Capital Plan. This level of funding
is unmatched in the rest of Canada. The Capital Plan includes:
-
$2.7 billion for provincial highway projects and municipal
transportation grants,
- $1.1
billion for health facilities and equipment,
- $1.1
billion for schools and post-secondary facilities, and
- $1.6
billion for other capital, including community facilities,
centennial projects, water and wastewater management,
housing, parks and information technology.
The
government’s Fiscal Plan for the three years commencing
April 1, 2004 was prepared under my direction in accordance with
the Government Accountability Act and the government’s
accounting policies. All of the government’s policy decisions
as of February 27, 2004 with material economic or fiscal implications
have been considered in preparing the three-year Fiscal Plan.
The government is committed to achieving the planned results laid
out in the Fiscal Plan, which includes the government’s
Business Plan and Capital Plan.
[original
signed]
Patricia L. Nelson
Minister of Finance and
Chair of Treasury Board
March 12, 2004
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