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Is the UCP spending spree really that impressive?

The UCP is increasing spending with their $12.3 billion budget surplus. But you might want to hold off on celebrating for now.

Late last month, the Alberta UCP government released their mid-year fiscal update, where they patted themselves on the back for a $12.3 billion surplus, driven by oil prices being higher than they had originally forecasted.

With $14.3 billion more in revenue than they had planned for this past spring, they have decided to increase budgeted spending by $2.5 billion. Of that, $1.2 billion is being added to operating expenses for the ministries.

That might be seen as a good thing, but I thought I’d provide some extra context, in case people get too excited about this increase.

First, let’s take a look at how the new forecast compares to the original budget set back in February.

BudgetForecastChange
Advanced Education$5,444$5,441-$3
Ag., Forestry & Rural Econ. Dev.$860$859-$1
Children’s Services$2,388$2,386-$2
Community & Social Services$3,923$3,918-$5
Culture & Status of Women$150$162$12
Education$8,390$8,454$64
Energy$559$1,181$622
Environment & Parks$507$604$97
Health$22,018$22,358$340
Indigenous Relations$165$166$1
Infrastructure$408$411$3
Jobs, Economy & Innovation$380$384$4
Justice & Solicitor General$1,475$1,525$50
Labour & Immigration$225$228$3
Municipal Affairs$261$260-$1
Seniors & Housing$701$690-$11
Service Alberta$452$457$5
Transportation$461$460-$1
Treasury Board & Finance$1,848$1,846-$2
in millions $

The largest increase is to Pete Guthrie’s energy ministry, which is set to get $622 million more than originally planned. Jason Copping, minister of health, is second in line for the highest increase, at an extra $350 million.

Environment & Parks’ Sonya Savage comes in a distant third, with just under $100 million, followed by $64 million more for Adriana LaGrange in education and $50 more for the minister of justice, Tyler Shandro.

All other increases are $12 million or less.

Even with the spending spree, 7 ministries will still see a reduction in operating expense spending:

  • Seniors & Housing: -$11 million
  • Community & Social Services: -$5 million
  • Advanced Education: -$3 million
  • Children’s Services -$2 million
  • Treasury Board and Finance: -$2 million
  • Agriculture, Forestry & Rural Economic Development: -$1 million
  • Transportation: -$1 million

Now, for the extra context, here’s how things look for the UCP’s final year in office compared to how much the NDP spent in their final year in office.

ForecastNDPChange% change
Advanced Education$5,441$5,392$490.91%
Ag., For. & Rural Econ. Dev.$859$931-$72-7.73%
Children’s Services$2,386$1,492$89459.92%
Community & Social Services$3,918$3,636$2827.76%
Culture & Status of Women$162$293-$131-44.71%
Education$8,454$8,223$2312.81%
Energy$1,181$477$704147.59%
Environment & Parks$604$427$17741.45%
Health$22,358$20,409$1,9499.55%
Indigenous Relations$166$196-$30-15.31%
Infrastructure$411$489-$78-15.95%
Jobs, Economy & Innovation$384$272$11241.18%
Justice & Solicitor General$1,525$1,452$735.03%
Labour & Immigration$228$203$2512.32%
Municipal Affairs$260$263-$3-1.14%
Seniors & Housing$690$631$599.35%
Service Alberta$457$547-$90-16.45%
Transportation$460$442$184.07%
Treasury Board & Finance$1,846$1,672$17410.41%
in millions $

Before we get into it, there are a couple of things you need to know.

The UCP renamed some of the ministries after they took office and in the 3 years since then. For example, under the NDP, the Agriculture, Forestry & Rural Economic Development ministry was called Agriculture & Forestry; Culture & Status of Women was Culture & Tourism, and Status of Women was a separate ministry; Jobs, Economy & Innovation was called Economic Development & Trade; and Labour & Immigration was just called Labour.

In the table above, only 5 ministries see a reduction in spending over the last 4 years.

  • Culture & Status of Women: -$131 million
  • Service Alberta: -$90 million
  • Infrastructure: -$78 million
  • Agriculture, Forestry & Rural Economic Development: -$72 million
  • Indigenous Relations: -$30 million

But as you can see, those reductions are much larger than those seen by the 7 ministries mentioned earlier.

That being said, some ministries got what seem to be big boosts.

Look at the health ministry, which is going to get nearly $2 billion more than what the NDP spent in their final year. That’s an increase of just under 10%.

While that may seem impressive, keep in mind that the Consumer Price Index in Alberta has increased from 141.4 in October 2018 to 161.8 in October 2022. That’s an increase of 14.4%.

In other words, as impressive as $2 billion in more health spending might sound, that’s not even enough to cover inflation.

Children’s Services saw their budget increase by nearly $900 million since the NDP were in power, and that’s an impressive 59.92% increase—much more than inflation.

But keep in mind that a huge chunk of that is connected to the childcare subsidization agreement the province has with the federal government and is propped up by federal funds.

Last year, the UCP government spent $1.706 billion in Children’s Services operating expenses, so $2.386 billion in this year’s spending is significantly up from last year.

The budget they set in the spring allocated $666 million for that programme specifically, and the increase in operating expenses for the entire ministry over the last year is $680 million.

That same budget claimed that the federal government was providing “$539 million additional funding under the new Canada-Alberta Canadawide Early Learning Child Care Agreement”.

So, while it’s cool they’re increasing spending in this ministry, nearly all of it is going to the new childcare subsidization programme, 80.9% of which is coming from federal funds.

The next largest increase is for the energy ministry, which is supposed to get $704 million more than what was seen under the NDP. This should surprise no one. While the the NDP have a crush on the oil & gas sector, the UCP are more of a stalker.

Community & Social Services comes in fourth place with an extra $282 million more than they got in the NDP’s last year, but that’s a 7.76% increase. Inflation over the last 4 years was nearly twice that high.

K–12 education is the only other ministry with an increase above $200 million, but even their $231 million increase since 2018–2019 is only a 2.81% increase, the second smallest percentage increase. Inflation was more than 5 times that.

In fact, outside energy and Children’s Services, only two other ministries saw increases over the last 4 years that were higher than inflation.

Environment and Parks saw a 41.45% increase with their $177 million extra funding, and the $112 million more that Jobs, Economy and Innovation will receive is 41.18% than what they got in the NDP’s final year.

Every other ministry got a reduction in funding or their funding wasn’t enough to cover increases to inflation.

Of those who saw an increase, the advanced education ministry, which oversees universities, colleges, and trade schools saw the smallest percentage increase, just 0.91%. If spending on postsecondary education had kept up with inflation over the last 4 years, it be nearly 16 times higher this year.

And if we’re not keeping up with inflation—on postsecondary spending, or any other programme in the province—then we’re getting screwed. Because how much we’re spending relative to how much things cost is decreasing.

So, while some people may be getting excited about the UCP spending $1.175 billion more this year than originally planned and $4.343 billion more than what the NDP spent, it’s nowhere near as exciting as they’re making it out to ne.

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By Kim Siever

Kim Siever is an independent journalist based in Lethbridge, Alberta. He writes daily news stories, focusing on politics and labour.

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