On Thursday, October 24, the Alberta government released the provincial budget, which was nothing short of a brutal frontal assault on province’s public services, workers and the poor. The government outlined it would cut program spending by 2.8% over the next four years. This 2.8%, the largest cut to provincial program spending in 25 years, will reduce 7.7% of the public sector in the next four years, resulting in the loss of thousands of jobs.
The UCP budget will also give a 4.5 billion dollar tax cut to the rich and implement the ‘Alberta Job Creation Tax Cut’, which cuts the tax rate for large corporations from twelve to eight percent by 2022. Albertans will pay for these tax cuts in the form of layoffs, austerity and cuts to municipalities, social assistance and other services.
The budget follows the release of last months ‘MacKinnon Panel Report’, an 84-page document with 26 recommendations of how to “balance the budget” by 2023. The report was written by a six-person board made up of former deputy ministers, people from the academic sector, the CEO of ATB financial, and led by former Saskatchewan NDP finance minister Janice MacKinnon. It recommended cutting the operating budget of the province by $600 million a year off the backs of workers through cuts to Alberta’s public services.
The most concerning aspects of the MacKinnon report targeted education, healthcare and social services for cuts and privatization. The budget followed the recommendations of the report specifically related to post-secondary education, which cuts 5.1% across 26 institutions, with plans to link funding to “performance”, ends the five year tuition freeze, increases the cost of student loans, and allows institutions to increase tuition yearly by 7%, which could result in a 21% raise in tuition fees over the next three years. Private Christian post-secondary schools however, will be exempt from the cuts.
The Alberta “Advantage”
It seems once again history is repeating itself. In 1993, the Klein government appointed a panel to review the provinces finances. The ‘Alberta Financial Review Commission’ lead to Klein’s government slashing $950 million dollars from government spending in the name of eliminating overspending and ‘balancing the books’. This resulted in attacks on education, health care, and social services sectors, and lead to workers leaving the province to find better working conditions.
The government argues that Alberta has an overspending issue, yet refuses to consider taxation as a way to invest in public services. Alberta is the lowest-taxed jurisdiction in Canada, has the lowest debt to GDP ratio and its expenditures (which the report failed to account for) are on average with the major provinces in Canada. Alberta’s economy has long been overly dependent on the price of oil and gas, which has resulted in a slow recovery after the 2015 recession.
Under the new budget, Albertans will be paying more in income taxes through “pausing indexation of tax brackets and credits”. This means that the overall personal income tax of Albertans will result in paying $600 million more in taxes, in addition to freezing wages in the public sector. Not indexing tax brackets means that with inflation, things will be more expensive for working class families.
Attacks on Public Services
One of the many groups this budget targets is people receiving social assistance from Income Support and the Assured Income for the Severely Handicapped (AISH). Many people use AISH to help with rent, food and medical expenses – because AISH dependents will no longer have payments indexed to the CPI, the 46,000 program recipients (who often only receive $1600 a month) will be worse off.
In addition to the cuts to the post-secondary sector, the UCP is further attacking education by freezing K-12 education funding, despite increased enrollment projected to increase to 60,000 new students over the next three years. The freeze will result in increasing class sizes, fail to support under-resourced teachers, and ultimately mean that school boards will receive less per student. Additionally, the action the UCP has already taken in eliminating the Summer Temporary Employment program and freezing the minimum wage and lowered to $13 an hour for workers under 18 will only further harm students.
The 1% increase to the healthcare budget does nothing to address the increase in population, and aging population regarding senior care. The budget cuts 46,000 seniors from the drug plan, delays plans for South Edmonton’s new hospital, targets ambulance services by providing $152 million less, and cancelled plans for the Edmonton lab facility. Over 4 years, taking into account population growth and inflation, it is a 17% cut to healthcare. Last week, Alberta Public Laboratories was renamed Alberta Precision Laboratories, signalling that privatization of lab facilities could be coming.
The UCP has also delayed the Green Line LRT project, putting 20,000 planned construction jobs at risk, slashes 50% of arts industry grants, and major cuts to municipalities that will affect Calgary flood mitigation infrastructure.
What is to be done?
No matter how the Alberta government spins it, reducing increases, not replacing retiring workers, and freezing wages are massive cuts to an already strapped public sector. This austerity budget and framing of the deficit as more important than jobs, public services and workers must be challenged in the courts and in the streets.
Many Albertans voted for the UCP based on promises to get Albertans back to work, with the understanding that front-line services would not be impacted. The Conservative government based part of this budget and its economic policy on the planned completion of pipeline projects such as the Trans Mountain expansion and Enbridge’s Line 3. The fossil fuel industry and boom times are not going to return, and this government has removed funding for climate change in all major industries, is spending 2.5 million on a public inquiry into ‘foreign funded’ opposition to the oil and gas sector, and $30 million on the Canadian Energy Centre or so called energy “war room”.
The labour movement has an immense opportunity to use this budget to mobilize their members. Fighting against privatization and calling for the diversification of Alberta’s economy through a Green New Deal that has the potential to create hundreds of thousands of low carbon jobs.
Unions have had successful anti-privatization campaigns that have worked. Running campaigns that educate the community and union members on the need for high quality public services can counteract the attacks this government is making on workers. A ‘Rally Against UCP Austerity’ will be held at 2:00 p.m. Thursday, October 31 at the Alberta Legislature in Edmonton. The Alberta Federation of Labour will also be holding a Town Hall on Resisting Kenney’s Cuts Tuesday, November 5 from 6:30 to 8:30 p.m. in the Engineered Air Theatre at Calgary Arts Commons.