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News Release


April 8, 2003

Budget 2003

Balancing the successes of the past with today’s priorities and a new fiscal strategy for the future

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Minister of Finance Patricia Nelson
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Making Alberta Even Better

Edmonton … A balanced budget that invests in health, education, infrastructure and transportation and a new fiscal framework that gets Alberta off the energy roller coaster are the focus of Budget 2003, which was tabled in the Alberta Legislature by Finance Minister Patricia Nelson.

“Albertans have told us health, education and infrastructure are priorities,” said Nelson. “We will invest nearly 70 per cent of our budget in the Ministries of Health and Wellness, Learning, Infrastructure and Transportation. At the same time, Albertans have asked us for predictable and sustainable funding for priority programs. They want to know that our budgets are not driven by the ups and downs in the energy sector. That’s why we’re setting up the Alberta Sustainability Fund, to ensure Albertans’ priorities receive sustainable funding now and in the future.”

Budget 2003 Highlights:

  • Tenth consecutive balanced budget.
  • No tax increases, no new taxes, Albertans have the lowest overall tax burden in the country.
  • Base operating spending (excluding expense for capital purposes) will increase by 4.9 per cent.
  • Total expense is $20.8 billion in 2003-04. Spending for Health and Wellness; Learning; Infrastructure and Transportation will account for close to 70 per cent of the budget.
  • Oil prices are assumed to average $23.30US per barrel and natural gas is assumed to average $4.05Cdn per thousand cubic feet (mcf).
  • Alberta is expected to be one of the economic growth leaders among all the provinces at 3.6 per cent.
  • Corporate taxes cut to 12.5 per cent, the small business rate cut to 4 per cent for a total savings of $95 million this year.
  • 37,000 new jobs are expected in 2003, with over 100,000 more jobs expected by 2006.

Capital Plan

“Alberta’s strong economy means more people are choosing Alberta as the ideal place to work and raise their families,” said Nelson. “We are responding to this tremendous growth with a capital plan that will invest $5.5 billion modernizing and building new roads, hospitals and schools over the next three years.” The $5.5 billion capital plan includes a $910 million capital account that was established from surplus cash from the 2002-03 fiscal year.

  • The capital plan includes major projects deferred in the fall of 2001 that have not yet been funded.
  • Capital support to school boards, post-secondary institutions, health authorities, municipal governments, and other local authorities and organizations will total $3.2 billion.
  • Spending on government owned capital assets, including highways, will total $2.3 billion.

See attached news release on capital plan for more details.

New Fiscal Framework

“The new fiscal framework is also designed to get this province off the energy roller coaster and into a new era of predictable and sustainable budgets,” said Nelson. “Energy prices will no longer dictate spending increases when prices are high or spending cuts when prices are low. We will put $3.5 billion of non-renewable resource revenue towards program spending. Oil and gas revenue over and above $3.5 billion will be put into the Alberta Sustainability Fund to ensure stable funding when prices fall below our forecast.”

  • Non-renewable resource revenue over $3.5 billion will be deposited into the Sustainability Fund as will cash from year-end surpluses.
  • Withdrawals from the Fund can only be made if non-renewable resource revenue is less than $3.5 billion; to offset significant in-year declines in other revenue streams, for emergencies or disasters or to provide assistance under the Natural Gas Price Protection Act.

The new fiscal framework maintains the government’s commitment to balanced budgets and legislated debt retirement. The government has reduced the accumulated debt by nearly 80 per cent from $22.7 billion to $4.8 billion. Cash previously set aside for debt reduction will cover all of this year’s debt payments and a portion of next year’s.

Financial Management Commission

In Budget 2003, the Government of Alberta is acting on recommendations put forth by the Financial Management Commission, which was announced in last year’s budget. The Commission was asked to review and recommend ways to improve on Alberta’s position as a strong fiscal leader. The Commission offered 25 recommendations in its report Moving From Good to Great. Last September, the government accepted or modified 22 of the report’s recommendations for a new fiscal framework, including establishing a long-term capital plan and a sustainability fund to better manage the peaks and valleys of volatile energy prices.

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Index for all Budget 2003 News Releases, Backgrounders and Budget 2003 Documents:

Charts and Graphs

 

Backgrounder: Budget Summary By Ministry

Aboriginal Affairs and Northern Development

The 2003-04 budget of $31.6 million is a decrease from the 2002-03 forecast of $63.7 million that included a one-time expense of $32.2 million for the Piikani Settlement Agreement. Increased funding has been provided for a multi-ministry initiative on Aboriginal consultation in the resource sector. Otherwise, the ministry’s funding is essentially unchanged from 2002-03.

For information, contact Peter Tadman (780) 415-0876.

Agriculture, Food and Rural Development

Total Ministry spending for 2003-04 is budgeted at $808 million compared to the 2002-03 forecast of $1.78 billion. Last year’s forecast includes approximately $1.1 billion in disaster spending resulting from the worst drought in Alberta’s history.

Budget 2003 provides additional base spending of $191 million to support enhancements of safety-net programs. Producers will be better able to manage risk within their individual operations through improvements to existing insurance programs and the addition of new insurance tools.

The increases in program expenditures will be partially offset by additional revenue from higher federal and producer crop insurance premiums resulting from program enhancements and increased participation.

The safety-net framework continues to include funding for the Alberta Farm Water Program. This program has been extremely well received by Alberta producers as another tool to help reduce and manage the water risks inherent in the agricultural industry.

For information, contact Terry Willock (780) 422-7683.

Children's Services

The 2003-04 budget for Children's Services is $708 million, up $36 million from the 2002-03 forecast of $672 million. By 2005-06, Children’s Services will receive $745 million. This includes increases for services to children and families in such areas as child welfare, early intervention, and services for children with disabilities.

The Alberta Response Model is a key initiative that has been developed to build on successful child protective services and improve community-based supports for families at risk. Increased funding supports the Alberta Response Model, and the implementation of amendments to the Child Welfare Act that are aimed at preserving families, protecting children in need, and ensuring that all children and youth reside in permanent, nurturing homes.

Regional Child and Family Services Authorities will receive $16 million more than last year for delivery of quality services for children, youth and families across Alberta. Family and Community Support Services will also receive a $3 million increase in 2003-04, following a $15 million increase in 2002-03.

For information, contact Mark Kastner (780) 427-4801.

Community Development

Community Development’s budget for 2003-04 is $647 million an increase of approximately 11% or $65 million from the 2002-03 forecast. By 2005-06, Community Development will receive $714 million. The increase for 2003-04 includes:

  • A $37 million (9%) increase in spending for Persons with Developmental Disabilities (PDD), rising from $406 million to $443 million, to provide for growth in the number of PDD recipients and other cost increases;
  • $2 million increase in funding to the Alberta Brain Injury Network (from $2.5 million to $4.5 million) to build on last year’s provincial network of training, support and outreach services that assist individuals with acquired brain injury and;
  • A $19.8 million increase in Lottery Fund support for the arts, recreation, sport, human rights and citizenship education, cultural diversity, volunteerism and heritage programs. This includes a $5 million increase to the Alberta Film Development Program (from $5 million to $10 million) to help Alberta's creative film and video community.

For information, contact Kathy Telfer (780) 427-2395.

Economic Development

The budget for 2003-04 will be $55 million. The department will focus on economic development through a value added strategy and a rural development strategy. Tourism marketing will be improved and there will be an expansion of marketable tourism products. Through international representation, the department will continue to build the information base required to deliver the right information in the right timeframe, to positively impact investment decisions.

For information, contact Mark Erdman (780) 427-0528.

Energy

Energy ministry spending for 2003-04 is $191 million, an increase of $12 million from a forecast
$179 million for 2002-03. This increase is primarily to support additional Alberta Energy and Utilities Board regulatory activities.

For information, contact Gordon Vincent (780) 422-3667.

Environment

The 2003-04 budget provides a $13 million increase to Alberta Environment, from a 2002-03 forecast of $109 million to $122 million for 2003-04. The increase is primarily to support two major strategies led by the department.

An additional $5 million is being provided for Alberta's Climate Change Action Plan. The funding will be directed to activities related to negotiating sectoral agreements aimed at reducing greenhouse gas emissions in key economic sectors in the province, funding for energy efficiency initiatives through Climate Change Central, and investments in climate change adaptation research. This funding complements $5 million in new funding at Alberta Innovation and Science.

$2 million is budgeted for the provincial water strategy, Water for Life: Alberta’s Strategy for Sustainability. Funding will be invested in a province-wide assessment of municipal drinking water treatment facilities and infrastructure, and in improving data collection and reporting systems for water quality and quantity.

An additional $2 million is being allocated within the department’s budget toward improving infrastructure for irrigation and municipal water supply systems operated by the province.

For information, contact Val Mellesmoen (780) 427-2848.

Executive Council

Executive Council’s budget for 2003-04 is $18 million, up from a forecast $17 million in 2002-03. Initiatives include improving services available to Albertans through information access points such as the Service Alberta Call Centre and Alberta Connects. Improvements to these systems will ensure Albertans continue to receive the information they need quickly and conveniently.

For information, contact Fay Orr (780) 427-4350.

Finance

Ministry spending is decreasing by over $16 million from a 2002-03 forecast of $451 million to
$435 million. This is due to a $25 million reduction in interest costs of the Alberta Capital Finance Authority (formerly Alberta Municipal Financing Corporation).

The decrease is partially offset by spending increases totaling $8.6 million. This includes $4.4 million for services provided to the pension plans by Alberta Pensions Administration and $0.9 million for payments by the province as part of the plan to eliminate the unfunded liabilities of the pension plans.

For information, contact Jerry Bellikka (780) 427-0788.

Gaming

Gaming's expenses in 2003-04 are about $150 million, an increase of approximately $26 million over the 2002-03 forecast of $124 million.

$13.5 million will be added to the Community Facility Enhancement Program, as indicated in last year's Business Plan, bringing total funding to $38.5 million for 2003-04. The Community Initiatives Program, introduced in June 2002, will continue at $30 million. The balance of the increase over 2002-03 includes a projected $4 million earned by charities through electronic bingo, a $1 million increase in revenues to each of Alberta's two NHL teams through their lottery ticket product, and an additional $4 million flowed to the horse racing industry through increased slot revenues generated at Racing Entertainment Centres.

Net revenue from gaming and liquor operations is expected to remain at about $1.6 billion.

For information, contact Marilyn Carlyle-Helms (780) 447-8719.

Government Services

The 2003-04 net operating expense budget for Government Services will be $83 million, up from the 2002-03 forecast of $76 million reflecting increased spending primarily to proceed with a new, more-secure driver's licence.

For information, contact Megan Parker (780) 415-6051.

Health and Wellness

Funding for 2003-04 will reach $7.35 billion, up $492 million or 7.2 per cent over the
2002-03 forecast. Future increases of 4.3 per cent and 5.8 per cent will bring Ministry spending to over $8.1 billion by 2005-06.

Health authorities receive an increase of 6.3 per cent, totaling $245 million or half of the total Ministry increase. Of this, $176 million is for increases in base operating grants for regional health authorities. An additional $50 million will buy new medical equipment. An $18 million increase to the Alberta Cancer Board includes $11 million more for cancer drugs. The Alberta Mental Health Board receives a $1.5 million increase to support provincial services and programs: forensic psychiatry, suicide prevention, Aboriginal mental health and tele-mental health.

Funding for province-wide services goes up $23 million, or 6 per cent, for highly specialized procedures like cardiovascular surgery, neurosurgery, major organ transplants, renal dialysis and psychogeriatric services.

An increase of $85 million will support health reform to meet Albertans’ needs in more collaborative and innovative ways, with a focus on primary health care, home care and catastrophic drug coverage.

An increase of $87 million is budgeted for physician services.

An increase of $52 million is allocated largely to meet increased costs for human tissue and blood products, ambulance services, out-of-province health costs, and Allied Health Services like chiropractic, optometry, podiatry and oral surgery.

For information, contact Michael Shields (780) 427-7164.

Human Resources and Employment

Ministry spending of $1.071 billion includes $739 million to help people in need, $266 million to help people train for work, and $25 million to help keep workplaces safe, fair and stable. Additional funding will be provided to:

  • Supports for Independence (SFI, or welfare), which will support a $20 monthly benefit increase starting in June for families and clients not expected to work. In addition, SFI clients with children will retain this year’s increase to the National Child Benefit Supplement in August.
  • Assured Income for the Severely Handicapped (AISH) to deal with ongoing caseload increases.
  • Workplace Health and Safety to support the Work Safe Alberta initiative to enable increased education and enforcement activity.
  • Support extended health benefits for some clients who leave SFI and AISH for work, and for clients who leave AISH as a result of higher disability benefits from Canada Pension Plan.

For information, contact Laurie Collins (780) 427-5649.

Infrastructure

Alberta Infrastructure's expense is increasing by 44 per cent to a total of $1.2 billion this year. The additional funding demonstrates this government's commitment to operating, preserving and expanding facilities across the province. Highlights include funding of $581 million for operations, $232 million for preservation and $326 million for expansion.

For information, contact David Bray at (780) 422-0506.

Innovation and Science

The Ministry 2003-04 operating expense budget is $200 million, an increase of $16 million over the 2002-03 forecast of $184 million.

This increase includes $5 million for Alberta's Climate Change Action Plan to accelerate the implementation of the Alberta Energy Research Strategy, including research into new technologies for the cleaner use of Alberta's coal resources. (Alberta Environment is also being provided with an additional $5 million as part of the additional $30 million to be provided over three years.)

The balance of the increase is related to additional research spending by Alberta Research Council Inc. under contract with private sector organizations and other parties.

The Ministry’s 2003-04 capital investment budget of $66 million is $29 million lower than the 2002-03 forecast of $95 million, primarily a result of the cash flow requirements for Alberta SuperNet being higher in 2002-03 than 2003-04.

For information, contact Glenn Guenther (780) 427-0285.

International and Intergovernmental Relations

IIR’s 2003-04 budget is $6.468 million, a $384,000 increase from the 2002-03 forecast.
The increase provides the ministry with financial resources to continue advocating and strengthening Alberta’s political and economic positions in Canada and around the world.

For information, contact Kathryn Wiegers (780) 422-2465.

Justice and Attorney General

Alberta Justice's 2003-04 budget is approximately $263 million. The budget reflects increases for ongoing program costs.

For information, contact Bart Johnson (780) 427-8530.

Learning

Excellence in Learning continues to be a top priority of Albertans and their government. With this year’s budget, base program spending by the Ministry of Learning will increase by $219 million or 4.7 per cent, bringing the total program spending to almost $4.9 billion in 2003-04. By 2005-06, this number will reach $5.2 billion (totals do not include property tax support to school boards that opt out of the Alberta School Foundation Fund).

For information, contact Mark Cooper (780) 427-0965.

Municipal Affairs

Alberta Municipal Affairs operating expense for 2003-04 is $132 million, down from the 2002-03 forecast $161 million. One-time costs of the 2002-03 disaster recovery programs were the primary reason for the high 2002-03 forecast. The 2003-04 budget of $132 million is equal to the 2002-03 budget.

The department will continue to work with municipalities to ensure sustainable, effective and empowered local government. This includes continuing to clarify how the roles, responsibilities and resources of provincial and municipal governments may be allocated to best serve Albertans. Also, the ministry through EMA (Emergency Management Alberta), will continue to strengthen its ability to prepare for, respond to and recover from major emergencies.

For information, contact Jay O’Neill (780) 422-8817.

Revenue

Revenue spending will decrease overall by $28 million to $166 million. In 2002-03, reassessments increased interest expense on corporate income tax refunds. These costs are expected to return to normal levels this year.

This budget also includes additional funds of $5 million necessary to enhance investment operations, address technology changes needed to meet changing industry standards, and improve tax and revenue collection operations as business volume increases.

For information, contact Cathy Housdorff (780) 422-4591.

Seniors

Alberta Seniors 2003-04 budget will increase to $354 million, up from $342 million in 2002-03. The increase includes provincial funding of an additional $6.5 million being added to last year’s $8.5 million budget increase for affordable housing, bringing provincial funding for the Canada-Alberta Affordable Housing Program to $15 million for 2003-04. An additional $20.5 million contribution by the Canadian Mortgage and Housing Corporation brings total funding for the affordable housing program to $35 million for the 2003-04 fiscal year.

Funding for the Alberta Seniors Benefit program will also increase by approximately $2 million to $156 million to assist low-income seniors, particularly those living in lodges, to access the additional supports they require as they age. This increase will be effective July 1st.

The budget also includes smaller funding adjustments in other areas.

The 2003-04 fiscal year will also see the administration of provincial funding for homeless shelters and the Office of the Public Guardian transferred to Alberta Seniors from Alberta Human Resources and Employment.

For more information, contact Jan Berkowski (780) 415-9950.

Solicitor General

Alberta Solicitor General’s 2003-04 of budget of $277.5 million reflects increases for ongoing program costs, and improved security operations to support the province’s crisis management process. Continued support for policing in Alberta, as well as an effective and efficient correctional services program, remain the main focus of the ministry’s operational budget.

For information, contact Jean Olynyk (780) 427-6153.

Sustainable Resource Development

The 2003-04 budget for Sustainable Resource Development is $202 million. Aside from some minor changes, base funding for the Ministry's programs remains relatively unchanged from 2002-03.

For information, please contact Susan McManus at (780) 427-8636.

Transportation

Transportation ministry operating spending for 2003-04 is $889 million, an increase of $181 million from a forecast $708 million for 2002-03. As well, capital investment for the Ministry will be $407 million in 2003-04, an increase of $93 million over the 2002-03 forecast. This will enable significant spending on improvements to Alberta’s transportation network.

For information, contact Cheryl Mackenzie (780) 427-7674.

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For media inquiries, please contact:

(Dial 310-000 for toll free access outside Edmonton.)

Jerry Bellikka
Director of Communications
Alberta Finance
(780) 427-5364
(780) 718-5699 cellular 		Go to Government of Alberta Home Page