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What you need to know about Alberta Budget 2020

Yesterday, the United Conservative Party (UCP) tabled their second budget in four months. Budget 2020 largely follows the fiscal plan that the UCP introduced in Budget 2019 on October 24, 2019. 

Below are some of the key takeaways and impacts the budget will have on the provincial economy and Albertans. 

Deficit, debt, and debt interest charges

Budget 2020 estimates the deficit for the 2019 fiscal year will be $7.5 billion, which is $800 million more than the $6.7 billion deficit in Budget 2018 (the Alberta New Democratic Party’s final budget). The UCP hopes to reduce the deficit in chunks. Budget 2020 projects a deficit of $6.8 billion in 2020, $2.7 billion in 2021, and a small projected surplus of $0.7 billion in 2022. 

These fiscal projections depend on a number of assumptions, perhaps the biggest of which is the hope that three new pipelines (Line 3, Trans Mountain expansion, and Keystone XL) will be built and start operating in the next three years. The UCP’s budget does admit, however, that “all three pipelines still face several regulatory hurdles” (page 60, Fiscal Plan). 

Budget 2020 estimates that Alberta’s total debt will be $86 billion by March 31, 2020, which is $5.2 billion higher than the NDP’s Budget 2018. Budget 2020 predicts that Alberta’s total debt will increase to $107.4 billion by March 2023. In sum, the UCP is planning to increase Alberta’s total debt by $27.4 billion or 33.9% over their 4-year mandate. 

In the NDP’s last year in government, Alberta’s annual debt interest charges were $1.971 billion, an increase from $0.776 billion in 2015. The UCP’s Budget 2020 predicts that Alberta’s debt interest charges will increase to $2.97 billion by 2022. 

Bitumen royalties

The UCP assumes that Line 3, the Trans Mountain expansion, and Keystone XL will all be built and that there will be no delays to current construction schedules. Based on these assumptions, the government projects significant growth in bitumen royalties of 39.9% in 2021 and of 36.8% in 2022. These assumptions by the UCP seem optimistic given past pipeline delays and ongoing opposition to these projects. 

Taxes and fees

Budget 2020 includes the following chart (page 169, Fiscal Plan). 

This chart shows that if Alberta had the tax system of any other province, then our provincial government would collect at least $14.4 billion more in revenue. The UCP, of course, has no plans to align our provincial taxes with those of other provinces. 

The UCP is continuing with their plan to cut corporate income taxes 33% -- from a rate of 12% in April 2019 to 8% by January 2022. The government is also implementing plans to tax vapes and short-term rentals (such as AirBnB rentals), which were announced in Budget 2019. The UCP is also increasing various user fees related to provincial parks and campgrounds. 

The UCP eliminated the NDP’s post-secondary education tuition cap, meaning tuition could rise as much as 7% in each of the next three years, making post-secondary education less accessible. 

Total expenses and operating expenses

The NDP’s Budget 2018 saw $56.318 billion in total expenses. The UCP’s Budget 2020 says they will keep total expenses above the 2018 total for each of the four years of its mandate. Total expenses are forecast to be $58.488 billion in 2019, $56.789 billion in 2020, $56.741 billion in 2021, and $56.905 billion in 2022. 

The UCP increased operating expenses in 2019 by 0.4%, which is actually a cut of 1.4% once inflation is accounted for. Accounting for inflation, the UCP plans to decrease funding to government operations by 3.67% in 2020, 2.6% in 2021, and 2.2% in 2022. 

Public sector jobs and compensation 

The UCP plans to reduce total compensation for Alberta’s public sector by 3%, from $27.288 billion in 2019 to $26.474 in 2022 (page 143). Adjusting for inflation, this represents a 9% cut to public sector compensation over three years. 

The full-time equivalent positions that the UCP plans to terminate in 2020 are listed on page 218 of the Fiscal Plan. In total, the UCP plans to terminate 1,436 full-time equivalent public sector jobs in 2020. The departments that will receive the largest number of terminations are: advanced education (398 jobs), agriculture and forestry (277 jobs), school boards (244 jobs), and community and social services (136 jobs). 

Capital Plan 

The UCP’s Capital Plan includes $19.3 billion in spending over three years (2020-2022), for an annual average of $6.43 billion (page 150). 

Budget 2019 said Alberta’s 10-year average for capital spending was $7 billion per year, so the UCP is not planning to meet this long-term average. 

The UCP plans to find “savings” by delaying road maintenance, delaying the opening of the new Edmonton hospital several years to 2030, and offloading some costs onto school boards and municipalities. 

Heritage Fund

The UCP’s Budget 2019 and Budget 2020 continue the NDP practice of inflation-proofing the Heritage Fund. For example, the Heritage Fund is forecast to increase from $16.2 billion in 2019 to $16.6 billion in 2020. The estimated 2.47% increase is a bit higher than the anticipated inflation of 2% for fiscal year 2020. 


The Government of Alberta highlights that it is prioritizing the Alberta Surgical Initiative (more privatized surgeries), Connect Care (an NDP-era initiative), midwifery (probably good!), and commissioning (contracting private companies) long-term care and designated supportive living spaces.

Budget 2020 brings up recent news about cutting physician pay, but indicates that funding will focus on patient-centred care. It’s hard to imagine how that will work if reduced compensation pushes physicians to leave the province, given that most patients want to have doctors.

Budget 2020 uses the Ernst & Young AHS review to justify contracting out (ie private provisioning of publicly funded services) 80,000 more surgeries by 2022-23 (read more about that report here). Currently ~15% of Alberta’s surgeries are contracted out. This move is unlikely to dramatically cut costs because as shown by EY, AHS, as the largest health authority in Canada, has the benefit of an economy of scale. As evidenced by differences in wait times for cataract surgeries in Edmonton (18% contracted out) vs Calgary (96% contracted out), expanding private surgeries does not necessarily reduce wait times, which are nearly 6 weeks longer in Calgary than Edmonton.

Buoyed from the pro-privatization, anti-worker Ernst & Young review, the government projects cuts to administrative staff in Budget 2020. Budget 2020 anticipates cuts of about $10 million per year until 2022-23. In other words, 2021-22 will see a 2.3% cut in administrative funding, followed by another 2.5% in 2022-23.

Notably, the section on mental health and addictions contains no mention of harm reduction or supervised consumption sites. This omission is concerning for people who work in and access these vital services. See more about harm reduction in Alberta on Parkland’s blog.

Despite increasing costs and need for long-term and continuing care, the Government of Alberta projects lower expenditures going forward. This line item is an area to watch given this government’s favourable attitude towards privatization, the recommendation in the Ernst & Young report to sell AHS’s wholly-owned long-term care subsidiaries, and the substandard care already provided across all types of residential senior’s care in Alberta.

K-12 education

One wild move in Budget 2020 is the sudden dip of funding for K-12 education over the next two years. From 2019-20, the dollar amount for K-12 education increases somewhat, from $8.2 to 8.3 billion. However, the amount funded by the Government of Alberta in 2020-21 is decreasing by $9 million while offloading costs onto school boards, who are supposed to raise a total of $121 million in 2020-21 through their own initiatives, or by drawing on reserves. 

Targets for 2021-22 show overall funding (including from own-source/reserve funding) decreasing by about $75 million. Factoring in CPI and population growth, K-12 education in Alberta is facing a cumulative 7% cut.

Even lower ministry support services (6 million) than projected in 2019 (p129). Dramatic cuts to program support services actual and prediction

Budget 2019 showed planned decreases to private school funding in 2021 and beyond. However, Budget 2020 plans for increases private school funding, above 2018 levels, and the 2019 forecast. 

This budget shows a small increase in instruction spending in 2020-21, but with CPI and population growth, it amounts to a 2.8% decrease, followed by further cuts in 2021-22. While the dollar amount that instruction is projected to go up is about $157million, Program Support Services is projected to go down by $220 million. It seems like this budget is re-categorizing some of the work in Program Support Services as instruction rather than really increasing instruction spending. 

Post-secondary education

Advanced Education faces numerous cuts in 2020 and beyond. The share of funding generated by post-secondary institutions is supposed to increase to 48% by 2022-23 (from 43% in 2018-19). At the same time, overall post-secondary funding is decreasing by $346 million in 2020-21, a further $110 million in each of 2021-22, and 2022-23. Most of the cuts are coming from Student Aid and Post-Secondary Operations. 

The metrics by which post-secondary institutions get funding will change in 2020-21, focusing on ‘performance-based indicators’ that are supposed to show that students are prepared to get jobs after graduation. 

Seniors and Housing

Continued decreases to the Alberta Social Housing Corporation by $8 million in 2020-21, a further $9 million in 2021-22, and an extra $1 million in 2022-23, for a cumulative cut of $18 million over 3 years. These cuts put pressure on Alberta’s already insufficient social housing, and will have more families on waiting lists and/or in substandard housing. Budget 2019 showed Seniors Services getting about a million more in funding by 2022-23. Budget 2020, however, shows a decrease in Seniors Services spending from $33 Million in 2019-20 to $27 Million in 2022-23.

Children’s Services 

As indicated in 2019, the 2020 budget shows a decrease from $179 million to $46 million for the Alberta Child Benefit. This popular and effective program will be completely eliminated in the 2021-22 fiscal year. The Alberta Child Benefit (along with the Canada Child Benefit) cut child poverty in half in Alberta from 2015 to 2017. As promised in 2019, the Province is also cutting early intervention services for children and youths by $13 million from 2018 to 2020. Child Care faces a $28 Million cut in 2020, while Child Intervention will see a $14 million increase. Overall, Budget 2020 shows the Children’s Services ministry getting lower funding over the next three fiscal years than indicated by Budget 2019.

Social Services

Budget 2020 shows modest dollar amount increases to AISH, from $1,214 million in 2019 to $1,290 million in 2020-21. Notably, this increase is smaller than the one anticipated in Budget 2019 by about $18 million. With CPI and population growth, however, this change amounts to only a 2.7% increase. Budget 2020 projects AISH growing by only 2.0% in 2021-22 when predicted CPI and population growth are taken into account. 

In other exciting news, Budget 2020 shows projected decreases over the next 3 years in Employment and Income Support… because all the jobs are coming back…

Specifically, Employment and Income Support will see a 4.6% cut (8.2% with CPI and population growth) in 2020-21, a 9.8% cut (13.5% with CPI and population growth) in 2021-22, and a 11.3% cut (15.2% with CPI and population growth) in 2022-23. Given dramatic increases to households requiring income support in Alberta since 2014, decreasing funding for this area will have real impacts on families in need.

Also likely to affect those in need of assistance, Budget 2020 shows decreasing funding for Homeless and Outreach Support Services over the next 3 years, even though they promised to maintain it in Budget 2019.

Other Ministries

This budget collapses Agriculture and Forestry; Culture, Multiculturalism and Status of Women; Economic Development, Trade and Tourism; Energy; and Labour and Immigration into one “Resource Management and Economic Development” section.

Similarly, Environment and Parks; Indigenous Relations; Municipal Affairs; and Transportation are combined into “Environment, Regional Planning and Development” in Budget 2020. In Budget 2019, we found environment and climate change-related line items across numerous ministries that are now collapsed into bigger categories. Finally, Executive Council, Infrastructure, Service Alberta, and Treasury Board and Finance are collapsed into a category called “General Government.”

This move makes it easier to conceal where particular cuts are coming from, and it makes it more difficult to interpret what sectors and populations are going to be most heavily hit by funding changes. Our Budget 2019 post highlighted that emissions and climate change programs, regulation, and enforcement were budget areas facing cuts and restructuring. Without more detail in Budget 2020, and only sporadic references to climate change policy, Albertans are left without assurance that our Provincial government is prepared to tackle the climate crisis.

At a high level, Municipal Affairs is seeing a $14 million cut, Environment and Parks a $45 million cut, and Transportation a $25 million cut. Indigenous Relations is getting a $24 million boost. Service Alberta is facing a $31 million cut, while Infrastructure will get a $14 million increase in funding.


Budget 2020 is built on two foundational assumptions, and both of these assumptions seem to involve the UCP betting on very optimistic outcomes. First, the UCP is betting that their 33% cut to the corporate income tax rate will result in significant additional revenue for the provincial government from increased business investment in the economy and a related increase in private sector employment. And, second, the UCP is betting that three new pipelines will be built and become operational in the next three years. 

As with Budget 2019, the tone and tenor of Budget 2020 presents few surprises. Overall, regular people can expect to see increased budgetary pressures on services that they rely on. These challenges include education and health care spending that don’t respond to inflation and population growth; and cuts to programs like the Alberta Child Benefit that families rely on to make ends meet.

In collapsing some Ministerial budgets into larger umbrella budget areas, Budget 2020 buries projected spending on programs and services that many Albertans consider important, like environment and climate change programs, consumer protection, and provincial parks.

The consequences for the UCP if either of these bets do not pan out is they have to explain to Albertans why the government is running larger than expected deficits. The consequences for everyday Albertans is we are already experiencing a decrease in our public services and programs, and, if the UCP’s bets do not pan out, we may end up experiencing even deeper cuts in the next three years.

Photo credit: Government of Alberta under a Creative Commons license.

Alison McIntosh

Alison McIntosh is a research manager at Parkland Institute. She completed her undergraduate degree in Human Geography at the University of Alberta. Her master's research in Geography at Simon Fraser University was part of a SSHRC-funded, community-based project investigating food security for low-income people living with HIV who use drugs. After finishing her MA, Alison worked in student services research, and research ethics at the University of Calgary.

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Ian Hussey

Ian Hussey worked as a research manager at the Parkland Institute for nearly nine years. He is the author of “No Worker Left Behind: A Job Creation Strategy for Energy Transition in Alberta” (Parkland Institute, 2023), “Job Creation or Job Loss? Big Companies Use Tax Cut to Automate Away Jobs in the Oil Sands” (Parkland Institute, 2022), and “The Future of Alberta’s Oil Sands Industry: More Production, Less Capital, Fewer Jobs” (Parkland Institute, 2020). Ian is also the co-author, with Emma Jackson, of “Alberta’s Coal Phase-Out: A Just Transition?” (Parkland Institute, 2019). Ian was a steering committee member of the Corporate Mapping Project, a seven-year initiative supported by the Social Science and Humanities Research Council (SSHRC) that was focused on the oil, gas, and coal industries in Western Canada (2015-2022).

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