Edmonton... Budget 2002 includes a balanced approach in addressing the $1.6 billion revenue shortfall and the lingering impacts of global economic uncertainty. Overall, spending will be less than previously planned, selected revenues will be increased and some programs have been restructured. These actions have been carefully targeted to minimize the effect on core government programs and Alberta's tax competitiveness. Tobacco tax Tobacco is the leading avoidable cause of illness and premature death in Alberta and in Canada, leading to 3,400 premature deaths annually from tobacco in Alberta alone. In response to that challenge, tobacco taxes will be increased by $2.25 per pack. The increase is expected to generate added revenues of about $281 million in 2002-03. The Alberta Alcohol and Drug Abuse Commission (AADAC) will lead the implementation of a provincial tobacco reduction strategy, with the participation of a broadly based cross-government partnership. This budget allocates $11.7 million to support tobacco reduction through activities such as promotion and prevention programs, cessation programs, and enforcement. Studies in other jurisdictions have shown that increasing the price of cigarettes by $1 per pack will reduce smoking by between five and seven per cent among adults and between 10 and 20 per cent among youth. Health care insurance premiums "Public health care is not free. Whether through taxes or premiums,
the public pays for public health care. The growing costs of health care are
part of the reason we are not waiting to implement our ambitious plan for health
reform." Effective April 1, 2002, health care premiums will increase from 11 per cent to just under 13 per cent of the $6.8 billion in total Health and Wellness spending. This amounts to a $10 per month increase for individuals and $20 for families. This will raise $184 million in additional revenue for the current business plan to ensure regional health authorities meet their priorities. Health care insurance premiums will now cover a greater proportion of health care costs, as recommended by the Premier's Advisory Council on Health. Lower income Albertans will continue to have access to premium subsidies or exemptions. Subsidies will be enhanced, particularly for lower income families with children. Of the total 443,700 recipients of full or partial subsidies starting on April 1, 2002:
Highway Traffic fines "Over the past six years, the volume of highway traffic tickets being
issued has exploded from 880,000 in 1994-95 to nearly 1.3 million last year.
That has put an increasing burden on our court staff and our budget. It makes
sense to collect what we need to cover our costs, and at the same time, not take
anything away from the municipalities." Effective April 1, 2002, the Alberta government will increase Highway Traffic Act fines by 20 per cent and retain the increase to offset spiraling costs of processing the increasing volume of highway traffic tickets and fines. This revenue, which is expected to total about $13 million in the coming fiscal year, will go directly to Alberta Justice. Municipalities will continue to receive the same amount they received prior to the fine increases. Court fees "Increasing the fees will better reflect the costs of providing these
services, although it will still represent just a fraction of them. It will also
ensure litigants are serious about their claims and are ready to proceed, so
that court time is not wasted, and will encourage litigants to look at other
methods to resolve their disputes." Alberta Justice will increase certain court fees to better reflect the cost of providing those services. As of April 1, 2002, filing a notice of appeal in the Court of Appeal or a certificate of readiness in Court of Queen's Bench will increase from $200 to $600, while filing a civil claim in Provincial Court (small claims court) or an appointment for a solicitor/client taxation will increase from $25 to $100. The fee increases are expected to generate an additional $2.7 million a year. Court fees in these areas have not gone up since 1993-94 while the cost of delivering court services has increased dramatically during the same period. Motor vehicle service fees "This is the first increase to be applied across the board in 12
years and it's coming at a time when we must keep up the superior service we
provide to Albertans, despite fiscal challenges." Effective July 1, 2002, Albertans will pay higher fees for motor vehicle services provided through registry agent outlets. The fee increases will generate an extra $45 million, needed to fund and protect Albertans' priorities in 2002-03. About $13 million will be used to begin upgrading three of Alberta Government Services' registry systems - the personal property registry, land titles registry and the motor vehicles registry. For an average Albertan with a car and a licence, the costs for a yearly vehicle registration renewal will rise from $48 to $61 and a five-year driver's licence renewal will rise from $40 to $55. An additional $7 registry agent service fee is also applied. Liquor markups The markups on liquor will be increased on April 5, 2002. These changes will generate an estimated $50 million in increased liquor revenue per year. Retailers will continue to have and ability to set their own retail price and Albertans will still enjoy some of the lowest liquor prices in Canada. Since 1993, markups have decreased five times. This is the first time the liquor markups have been increased since privatization. The current graduated markup system for beer, based on production volume, will also be simplified into two categories from four to ensure that small breweries can remain competitive. Spending on infrastructure "Although economic conditions have reduced the dollars we have to
spend, there are still more than 1,100 projects going ahead. Priorities will
also be focused on maintaining existing infrastructure such as schools, health
facilities and government-owned facilities." "The safety of Albertans and the traveling public are our first
priority. For these reasons funding for highway maintenance and traffic safety
programs will be maintained and funding for the Municipal Water and Wastewater
program will be sustained. Safety will not be compromised." While one-time infrastructure spending of $631 million that was planned for 2002-03 has been deferred, the government will spend $1.1 billion on infrastructure projects in 2002-03. $545 million will be spent in 2002-03 on the transportation network throughout the province. Funding for highway maintenance and traffic safety programs will be maintained and funding for the Municipal Water and Wastewater program will be sustained at $25 million as these programs are essential to the health and safety of Albertans. Almost $200 million will be spent in 2002-03 on infrastructure projects such as health care facilities, schools, and post secondary institutions. Funding for projects previously deferred in 2001-02 will continue to be deferred until replacement funding becomes available. Work will continue on the Provincial Archives and Royal Tyrell Museum projects, however work will stop on all remaining Centennial projects. Funding for Premier's Task Force on Infrastructure initiatives will be deferred and overall funding will return to base levels. However, the Ministers of Transportation and Municipal Affairs will work with all municipalities over the course of the year to look at future funding options. Government will continue to look for innovative ways to maintain and improve Alberta's highway system in the future and will be talking to partners and stakeholders in the construction industry to find solutions. Other areas: Crime prevention and restorative justice grants Alberta has put safe communities first in the 2002-03 Solicitor General budget by focusing funding on policing and corrections. Crime prevention and restorative justice grants for community-based programs have been eliminated. However, funding for community-based crime prevention programs will remain available through the Proceeds of Crime and Community Mobilization funds, co-administered by the federal government and Alberta. School property tax Government is lifting the freeze on school property tax revenue, increasing government revenue by $45 million in 2002-03. Although the school property tax mill rates will be reduced by 1 per cent for 2002, lifting the freeze will result in more revenue from increases in property values and new residential and industrial development. - 30 - Backgrounders:
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For more information, contact the following. Dial 310-0000 for toll free access outside Edmonton.
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