Yesterday the Alberta Government released its 2024 Budget.

Summary/Political Context

Alberta Finance Minister Nate Horner tabled his first budget, which includes more than $70 billion in spending and a surplus of $367 million. Restraint and austerity are the key words that define this budget. Premier Danielle Smith’s goal of keeping spending increases below 6.2% (this figure is based on inflation combined with population growth) has been met. Health Care and Education are the big winners in this budget.

Fiscal Projections/Economic Outlook

The province plans to spend $73.2 billion this fiscal year – a 3.9% increase from last year. It is estimated that resource revenues will contribute approximately 25% to Alberta’s overall revenue. A large part of this revenue is based on the government’s forecast of West Texas intermediate crude at $74 USD a barrel. Current price is $78 USD a barrel. However, each dollar drop in the price of oil will account for $600 million decrease in revenues. The government will put $2 billion towards the Heritage Savings Trust Fund for a total of $25 billion. 

While this is a balanced budget, the province is in a negative cash position due accounting adjustments and borrowing needs (even though expenses are lower than revenues). The provincial debt is now at $78.4 billion.

Themes

Health Care

While this is not a health care budget, the government committed to restructuring the provincial health care system. The investment this year totals $26 billion – an increase of 1.2 billion compared to last year. The focus is on increasing capacity, improving primary care, reducing wait times and growing the workforce ($122 million allocated to physician recruitment and retention). Health capital funding will receive $3.2 billion for infrastructure and equipment. Alberta has opted out of the new national pharmacare plan announced in Ottawa but it is not clear in this budget if there is any new spending for the coverage of pharmaceuticals.  However, the province will spend $2 billion per year for Drugs and Supplemental Health benefit programs, including $883 million for the senior’s drug program.

Education

The government is investing in educational infrastructure and has allocated $681 million in new funding for the planning, design, construction, and modernization of schools across the province – the goal is to create 35,000 new modernized spaces. Another priority is increasing educational learning supports for vulnerable students, children with specialized learning needs, and other students requiring additional supports – $1.5 billion has been allocated.

Post-Secondary Education

The institutions that received additional funding are:

• MacEwan University (the new school of business building will receive $75 million over three years).
• The University of Calgary ($55 million in order to create 1,000 new spaces in science, technology, engineering and math programs).
• Olds College ($63 million in capital funding to renovate and expand student spaces in the W.J. Elliott Building).
• NAIT ($43 million in capital funding for the planning of the trades and technology learning facility).
• The University of Lethbridge ($43 million for Rural Medical Teaching School to train doctors in smaller communities).
• Red Deer Polytechnic ($13 million in capital funding to create a new space to help businesses conduct applied research) are in receiving additional funding. 

Taxes

Some taxes are going up, primarily on cigarettes and vaping and there is a new annual tax on electrical vehicles. A personal tax cut will begin in 2026 and income up to $60,000 will be taxed at a rate of 9%, dropping to 8% the following year. However, this tax cut is contingent on the province having the fiscal capacity to implement this program. is projected to save 2.2 million residents up to $760 each. 

Affordable Housing

This budget has provided $717 million in capital grants for the province’s affordable housing strategy. However, this money is split over 3 years but includes $254 million in new funding to help build about 3,300 new affordable housing units and complete 1,800 units already being constructed.

Opposition Reaction

The Alberta NDP have stated that this budget does not provide enough funding for public health care or for the province’s growing education needs.  A post on X by the NDP claimed: “Less than a year. It has been less than one year since Albertans put their trust in Danielle Smith and the UCP’s promises to fix our healthcare system and make life more affordable. They have broken their promises at the very first opportunity.”

Of note, we would like to congratulate the Winspear Centre for securing $9 Million over three years, and we are excited about the $1 million allotted to reviewing the Gaming, Liquor and Cannabis Act to reduce the regulatory burden on business and increase contributions to Alberta charities and community facilities.

For more information, please contact Diplomat Consulting at: hello@diplomatconsulting.com.

Ivan Ross Vrána
Managing Partner