Government of Alberta: Budget 2008

Right Plan for Today and Tomorrow


What's in Budget 2008 for Albertans?

What's in Budget 2008 for...


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  • This is Alberta's 15th consecutive balanced budget.
  • It includes $1 billion in savings to Albertans and Alberta businesses with the elimination of health care premiums on January 1, 2009.
  • The budget is aimed at managing Alberta’s growth and priorities for the future.
  • All Albertans benefit from the increased funds to improve municipal infrastructure, highways, hospitals and schools.
  • Budget 2008 maintains Alberta’s overall low taxes.
  • If Alberta had the same tax system as any other province, Albertans and Alberta businesses would pay between $10 billion and $18 billion more in taxes each year, after the elimination of health care premiums. This is equivalent to $3,000 to $5,000 more per capita in taxes every year.
  • Read the Budget news release

Communities

  • Government’s safe communities and crime reduction initiatives include:
    • $156 million in 2008-09, and a total of $468 million over three years, in new operating funding to develop and implement initiatives in response to the Safe Communities and Crime Reduction Task Force report.
    • $33 million budgeted to construct additional government-owned addiction treatment facilities.
    • An additional $29 million is allocated to provide more mental health and residential treatment beds, and comprehensive mental health services for inmates.
    • 100 additional front-line police officers in 2008-09, as well as more Crown Prosecutors and Court Services staff.
    • Implementing measures to allow for the seizure of illegally obtained property.
    • A Safe Communities Secretariat within the Ministry of Justice began operations on April 1, 2008. The Secretariat will oversee the implementation of various initiatives.
  • The new $1 billion federal Community Development Trust is intended to support communities most affected by changes in the global economy.
    • Alberta will use its share of the Community Development Trust Fund — $104.3 million — to support affected communities in a number of ways:
      • Training and skills development;
      • Increasing Aboriginal participation in Alberta’s labour force;
      • Investments to strengthen “one-industry” communities;
      • Investing in research and innovation for new and value-added products; and
      • Developing and strengthening infrastructure.

Businesses

  • Alberta businesses benefit from the lowest general corporate rate, and the second-lowest small business rate among provinces. In addition, they pay no capital taxes, payroll taxes or general sales taxes on their inputs, as they would in other provinces.
  • The amount of income that can be earned for the small business rate of three per cent was increased from $430,000 to $460,000 effective April 1 this year, saving Alberta businesses about $5 million this year. It will further increase to $500,000 on April 1, 2009.
  • A new 10 per cent provincial credit for scientific research and experimental development will take effect January 1, 2009, to promote Alberta as a knowledge-based economy.
    • The credit will be worth 10 per cent of a company’s eligible expenditures up to $4 million, for a maximum credit of $400,000.
    • The credit is refundable for all companies. This will be of special benefit to start-up and early stage companies, because they will still be able to receive the credit even though they may not be earning enough income to pay income taxes.
    • In 2008-09, operating funding for tourism related initiatives will increase by almost $10 million, or 17.5 per cent, to over $66 million. Over three years, about $211 million is allocated for these initiatives, as the province continues to raise awareness of Alberta as a tourism destination.
    • Alberta is paralleling federal changes to the Capital Cost Allowances. These changes include an extension of the accelerated rate for manufacturing and processing equipment, and increases to the rates for certain types of clean energy generation equipment, railway locomotives and carbon dioxide pipelines and related equipment.

The environment

  • The Climate Change Strategy will receive $30 million in annual funding to take action around three themes:
    • Implementing Carbon Capture and Storage;
    • Conserving and Using Energy Efficiently; and
    • Greening Energy Production.
  • As of July 1, 2007, companies that emit more than 100,000 tonnes of greenhouse gases a year must reduce their emissions intensity by 12 per cent. Companies have the option to pay $15 per tonne to the Climate Change and Emissions Management Fund, which will then be used to support strategic projects or transformative technology aimed at reducing greenhouse gas emissions in Alberta.
  • Over three years, $300 million in capital and $63 million in operating support will be provided to continue implementation of Alberta’s Water for Life strategy. Operating support includes $16 million over three years to expand the groundwater mapping program.
  • $55 million in 2008-09 will go to continue the aggressive fight against the mountain pine beetle infestation.
  • Implementation of a new Land-use Framework is expected to begin in 2008-09, with $7 million this year and a total of $42 million provided over three years. The framework will address competing uses of land and provide a sustainable approach that balances environmental, social and economic concerns.
  • • $1.8 million annually will go to the Institute for Agriculture, Forestry and the Environment to identify market-based solutions to increase environmentally-sound practices in the renewable resource sectors.
  • $404 million in Budget 2008 ($16 million in Budget 2007) to continue government’s efforts to develop and implement a long-term strategic plan for development of the oil sands.

First Nations and Métis Settlements

  • Work continues with the Settlements to implement initiatives which contribute to more effective governance, enhanced accountability and long-term sustainability. Budget 2008 includes $18 million over three years to support these initiatives.
  • 40 per cent of the net proceeds from slot machines at First Nations casinos flows back through the First Nations Development Fund to support the economic, social and community development of First Nations communities. Funding for this program will be $78 million in 2008-09, an increase of $22 million, or 39.3 per cent, from 2007-08.

Parents

  • $197 million in 2008-09, and $633 million over three years which includes $200 million in operating and $42 million in capital funding to begin adding 14,000 new child care spaces by 2011.
  • $10 million in new funding in 2008-09, and $35 million over three years, to implement a new out-of-school care program for children 6-12 years old.
  • A $2 million capital grant will help to create new child care spaces in Fort McMurray to meet community needs.
  • $151 million will be provided to support accredited private schools, as well as private operators that provide Early Childhood Services programs for children as young as two-and-a-half years of age.

K-12 students

  • Program spending on the basic education system will be over $5.8 billion in 2008-09. This includes:
    • $624 million for school capital projects. Over three years, support for school capital projects will be more than $1.6 billion, including $511 million for capital maintenance and renewal; and
    • $5.2 billion in operating support to school boards and other educational support, an increase of $217 million, or 4.3 per cent, allocated to:
      • A 4.5 per cent increase in operating grants to school boards;
      • $436 million to operate and maintain schools, a $19 million increase;
      • $212 million for the Class Size Initiative ($729 million since 2004-05);
      • $77 million for the Alberta Initiative for School Improvement to support local projects that help improve student learning;
      • $47 million for the Student Health Service Initiative to increase access to specialized support services for students with special health needs; and
      • $206 million to fund current service payments for teachers’ pensions.

Post-secondary students

  • More than $3.4 billion for operating and capital programs, an increase of 5.5 per cent, or $178 million.
  • Government is focused on improving accessibility and affordability in the post-secondary system. For instance:
    • Enrolment planning envelope funding will increase by $125 million to support capacity expansion in areas such as health care, engineering, apprenticeship and technology programs;
    • Tuition fee increases will continue to be limited to the rate of inflation in Budget 2008. On average, students saved more than $700 on tuition in 2007 under this policy.
  • In 2008-09, $188 million is going towards Alberta's provincial student assistance and debt relief programs - the most generous in Canada. This funding includes:
    • $103 million in scholarships, bursaries and grants benefiting about 36,000 students;
    • $18 million in grants to Registered Education Savings Plans;
    • $67 million for Alberta’s student loan and debt relief programs; and
    • The province is reducing the interest rate payable on Alberta student loans from Prime + 2.5 per cent to Prime. $126 million in student loans are expected to be disbursed in 2008-09
  • Almost $1.5 billion in post-secondary capital projects will be supported over three years. This will provide:
    • $1.1 billion for expansion and upgrading projects; and
    • $357 million for capital maintenance and renewal.

People with disabilities

  • $666 million for the Assured Income for the Severely Handicapped (AISH) program, an increase of $64 million or 10.7 per cent.
  • $571 million in supports to Persons with Developmental Disabilities Boards, an increase of $30 million, or 5.6 per cent.
  • Over $107 million in 2008-09, and almost $325 million over three years, for family support for children with disabilities, with a goal to make it easier for these children to develop their potential.
  • $18 million, an 88.8 per cent increase, in funding to decrease the impact of fetal alcohol spectrum disorder through improved diagnosis and assessment capacity and better coordination of services.
  • Effective for the 2008 tax year, credits for caregivers and individuals with disabilities will be increased by $5,000, on top of inflation indexing.
    • The caregiver, infirm dependant and disability supplement amounts will more than double to $9,355, while the disability amount will rise by 67 per cent to $12,466.
  • Income thresholds will be increased by $5,000 to $24,229 for the caregiver credit and $15,535 for the infirm dependant credit, meaning more people can claim one of these credits.
  • In general, taxpayers who are currently claiming one of these credits will be able to receive an additional benefit from these changes of up to $500 each year. For individuals who are able to claim both the disability amount and the disability supplement, benefits could increase by up to $1,000.

Albertans with lower incomes, seniors, and Albertans in need

  • $307 million in 2008-09, or more than $940 million over three years, for income support programs. Budget 2008 includes almost $289 million over three years for health benefit programs for income support clients, including $96 million in 2008-09.
  • $536 million in 2008-09, an increase of $20.5 million, to alleviate pressures in child intervention and foster care support. This includes funding for attracting and retaining staff in the agency sector.
  • An increase of $46 million, or 11.6 per cent, to $438 million in 2008-09 for the Alberta Seniors Benefit, the Seniors Lodge Assistance Program and other seniors programs.
  • The program to protect seniors from education property tax increases, in place since 2004, continues.
  • The Alberta Family Tax Credit will be enhanced by $25 million, bringing total benefits to $111 million. 115,000 lower and middle income families will benefit from this enhancement. The credit provides benefits to working families and assists them in moving off income support.

Affordable housing

  • $309 million in 2008-09, and $877 million over three years in capital support as part of government’s program to create more than 11,000 affordable housing units over five years, beginning in 2007-08.
  • $198 million in operating support in 2008-09 for affordable housing and homelessness initiatives, including:
    • $58 million for rent supplement program;
    • $42 million to housing providers through the Alberta Social Housing Corporation;
    • $5 million for special needs housing;
    • $44 million for the Homeless and Eviction Prevention Fund;
    • $38 million for emergency/transitional shelter support; and
    • $11 million for homeless and transitional housing initiatives.

Agriculture and rural development

  • Just over $1 billion will be provided annually over the next three years, going mainly towards joint federal/provincial agriculture programs.
  • The Competitiveness Initiative, announced in 2007, will make recommendations to improve local, national and international agriculture industry competitiveness. $61 million in 2008-09 — increasing to $67 million by 2010-11 — will go to support industry development and competitiveness initiatives.
  • The Agriculture Financial Services Corporation loan limits will increase from $2 million to $5 million, and the overall borrowing limit for the Corporation has increased from $1.2 billion to $1.4 billion. The increase in the overall borrowing limit means up to $200 million in additional capital will be available for lending to clients over the next three years.

Community groups and the arts

  • $20 million in 2008-09, and a total of $60 million over three years, will be provided to support the new Community Spirit Donation Program, which provides grants based on the level of eligible donations to Alberta-based non-profit organizations and registered charities.
  • An additional $12 million in 2008-09, largely for increased funding for the Alberta Foundation for the Arts, to support implementation of Alberta’s new cultural policy, “The Spirit of Alberta.”
  • The 2008-11 Capital Plan includes $526 million in 2008-09, and $705 million over three years for community facilities. Three new community facility projects are funded in 2008-09:
    • $50 million to support the Capital Region River Valley Park project;
    • $40 million to support the expansion of the TELUS World of Science in Calgary; and
    • $40 million in support for Alberta’s bid for the National Portrait Gallery.

Tax cuts

  • Health care insurance premiums will be eliminated on January 1, 2009. This change is especially important for Albertans with lower incomes who were not previously exempt from premiums. The elimination of health care premiums means that:
    • Albertans and Alberta businesses will save about $1 billion each year;
    • A two-income family earning $40,000 will have their provincial tax and premium bill reduced by as much as 80 per cent;
    • A single person earning $20,000 will have their provincial tax and premium bill reduced by as much as 46 per cent.
  • In 2008, income tax credit amounts will be indexed by 4.7 per cent. This means that:
    • Albertans will save about $132 million, rather than paying it to the government because of inflation.
    • A working family with two children that is eligible for the Alberta Family Employment Tax Credit can earn $41,000 before paying provincial income tax.

Surplus and savings

  • Budget 2008 estimates the surplus at $1.6 billion. This surplus will provide:
    • $279 million to inflation-proof the Heritage Fund;
    • $100 million to establish the Alberta Enterprise Corporation to provide early-stage venture capital to innovative companies; and
    • $325 million for the contingency allowance.
    • The remaining $864 million is required to help meet capital cash requirements or is retained by funds and agencies.
  • If the surplus is higher than estimated, the additional surplus dollars will be allocated according to government’s in-year surplus allocation policy, which provides one-third to savings and two-thirds to capital.
  • Government put more than $1.7 billion towards savings last year, mainly in the Heritage Fund.
More budget details.