Alberta eagerly awaits historic spending budget

Renata D’Aliesio

Herald and Canwest News Service

Tuesday, January 27, 2009

Budget ’09

Tories Promise $7B To Boost Economy

Calgary mayor says $4 billion for cities isn’t enough, as Ottawa also pledges billions for post-seconday schools and green projects

From Alberta’s legislature and city halls to oilpatch executives and laid-off workers, all eyes today are on the federal government’s biggest spending budget in history and what it will mean for Alberta’s ailing economy.

Even before Finance Minister Jim Flaherty introduces the new budget in Parliament, the Harper government unfurled one of the largest pieces of its stimulus package, announcing Monday $4 billion of new infrastructure cash for provinces and municipalities, $2 billion for construction at colleges and universities and a$1-billion fund for sustain-able-energy infrastructure.

Billions more in spending will be unveiled this afternoon, as the federal treasury plunges into deficit for the first time since 1998.

“The global credit crunch has dragged the world economy into a crisis whose pull we cannot escape,”Gov. Gen. Michaelle Jean said as she delivered the Conservative government’s throne speech Monday in the Senate.

“The government’s agenda and the priorities of Parliament must adapt in response to the deepening crisis. Old assumptions must be tested and old decisions must be rethought.”

Yet, expectations of astronomical spending are already fanning dissatisfaction in some quarters. Calgary’s mayor and an environmental policy think-tank panned Monday’s infrastructure stimulus as inadequate.

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Mayor Dave Bronconnier said he expects the city will receive around$140 million of the $4 billion being set aside for municipal and provincial construction projects, such as expanding transit and water treatment plants. He said he hoped the dollar figure was going to be much higher, as $4 billion doesn’t go very far when considering the needs of all municipalities.

For example, Calgary is spending $1.7 billion on infrastructure this year alone, the bulk of the money coming from provincial funding programs.

Bronconnier also took issue with some of the strings that could be attached to the cash, particularly the possibility both the city and the province will have to match federal dollars.

“Municipal governments like Calgary have been on the front lines and have invested heavily in infrastructure in the last number of years, and to ask for another one-third from the provincial government and one-third from the municipal government is going to be very difficult,” he said.

No one from the Alberta government would comment Monday on the federal budget, but Premier Ed Stelmach acknowledged recently Prime Minister Stephen Harper made it clear to the provinces he expects them to pony up their share of the economic stimulus.

Although the province is grappling with falling revenues due to collapsing oil and gas prices, Lloyd Bertschi, president of the Alberta Urban Municipalities Association, is hopeful the province won’t shy away from matching the federal government’s spending commitment.

“Obviously, at $40 a barrel of oil, the province is going to be under some pressure,”Bertschi said, “but they should continue to invest in infrastructure so we can get ready for the next boom and the next growth wave that comes along, and keep every-body working.”

Today’s budget will forecast deficits over the next five years, including a shortfall of $64 billion in the first two years.

Fort McMurray-Athabasca MP Brian Jean, parliamentary secretary to Infrastructure Minister John Baird, said short-term deficit-financed spending is necessary to jolt the country’s economy and replace lost jobs.

“We are taking a hit today to invest in tomorrow,” Jean said. “It’s better to pay on a mortgage than it is to rent a house and I think this is no different in this particular case.”

While the provincial breakdown of Ottawa’s $7-billion infrastructure package wasn’t provided Monday, Jean vowed “Alberta will get its fair share.”

However, he didn’t expect federal cash for green projects to surpass the $1-billion fund unveiled Monday.

Tim Weis of the Pembina Institute, an environmental policy think-tank, doesn’t think it’s enough, noting U.S. President Barack Obama pledged $65 billion to growing renewable energy and improving energy efficiency. With about 10 per cent of the United States’ population, Weis calculated Canada should invest $6.5 billion into similar initiatives to avoid lagging behind.

“The Canadian and the American economy are very linked,” Weis said. “Obviously, President Obama has set his sights on creating a whole new green-energy economy.”

University of Calgary provost and vice-president academic, Alan Harrison, worries Canadian universities may also lag behind if Ottawa’s research dollars don’t keep pace with the renewed U.S. focus on science.

© The Calgary Herald 2009