I was recently reviewing the 2021–2022 provincial budget, and I noticed this table.
This summarizes spending for the next 3 budget years. I draw your attention specifically to the health spending and the K–12 spending.
The UCP government plans to spend the same amount in both categories in all 3 years: $21.418 billion for health and $8.248 billion for K–12 education.
Now, on the surface, this could potentially be a good thing, right? I mean, look at “Other Ministries”; they lost money. So, it could be worse for health and education.
The thing is, however, that unless your population doesn’t grow and inflation doesn’t increase, a spending freeze is functionally a spending cut.
It’s simple math. Here, let me show you.
If you buy a pizza to share with your honey, you each get 4 pieces, right? But what if you have a couple of buddies over? Or you end up having a couple of kids?
Well, now everyone gets only 2 pieces each. Either that, or you get two cheese pizzas instead of one meat lovers.
You spend the same amount on pizza but everyone gets screwed over.
Here’s the population in Alberta for the last 4 years (as of 1 January each year).
| Population | Change | % change | |
|---|---|---|---|
| 2018 | 4,268,853 | 50,998 | 1.2% |
| 2019 | 4,330,698 | 61,845 | 1.4% |
| 2020 | 4,402,045 | 71,347 | 1.6% |
| 2021 | 4,436,258 | 34,213 | 0.7% |
Last year was an anomaly, likely because of COVID-19 restrictions preventing some people from moving here. The average population growth of the previous 3 years was 1.4%. Even if you include 2021’s data, the average growth is still 1.2%.
If we assume these average growth rates will continue, we could see between 107,109 and 125,085 more people living in Alberta by January 2023. That’s an increase of 2.4–2.8%.
Meanwhile, we plan to increase the health budget by 0% next year and 0% the year after. Same goes for K–12 education. That’s going end up feeling like a 2.4–2.8% spending cut.
Inflation is a similar story. In January 2018, the consumer price index in Alberta was 138.9. This is how much it costs a consumer to buy a set “basket of goods”. The price of that basket in January 2021 was 145.8.
| CPI | % change | |
|---|---|---|
| 2018 | 138.9 | 1.4% |
| 2019 | 140.5 | 1.2% |
| 2020 | 144.7 | 3.0% |
| 2021 | 145.8 | 0.7% |
Alberta saw an average annual increase of 1.6% during the same period. If we assume a 1.6% increase each year over the next 2 years, the CPI will be at 150.5 by January 2023. That’s an increase of 3.2% from this year.
Add that to the 2.4–2.8% population increase, and we’re looking at a 5.6-6.0% increase for health and education needs. Yet, the UCP think we can survive on 0% increases in spending.
Now, here’s where it gets interesting.
According to the 2021 budget, the UCP government plans to spend “$2.2 billion over the next three years [on] health care infrastructure
projects, including $143 million for new health care facilities.”
For example, they plan to spend $35 million over the next 3 years on a new community health centre in La Crete, $23 million to add 19 new NICU beds to the Foothills Medical Centre in Calgary, $59 million for a new ICU and coronary care unit at the Rockyview General Hospital in Calgary, and $18 million for a new cyclotron and radiopharmacy facility in Calgary.
That doesn’t even include previously announced health capital projects that are coming online this year and next year.
They also plan to spend $1.6 billion on capital projects in education, including 24 brand new elementary, middle, and high schools.
But as these schools and health care facilities come online, they’ll need to be staffed. Yet, if the government plans to spend $0 more on health and education, where will the money to come from for the teachers in those 24 new schools, or the nurses to care for patients in the 14 new NICU beds or in the new ICU and coronary care unit?
Alberta will have more health and education facilities over the next two years, it’ll have more people to use them, and it’ll cost more to operate them (and that’s not just salaries).
Yet they’ll have to manage with the same amount we’re spending this year.
And that means either fewer staff overall, worse services (longer wait times, larger class sizes, etc), or shutting down facilities elsewhere.
Or all three.
One reply on “UCP plan to freeze health & education spending for 2 years”
[…] that’s because the province has frozen spending in health and education for two years. You can’t effectively cut spending (if you factor population growth and inflation) and then be […]