May 5, 2008

Alberta budget injects billions into infrastructure development

RICHARD GILBERT

staff writer

The Alberta Budget 2008 unveiled by Ed Stelmach’s government includes plans to inject a massive multi-billion dollar investment into infrastructure development in the next three years.

When the people of Alberta voted in the last provincial election on March 3, 2008, critics of the government argued that the Stelmach Conservatives failed to present a clear vision for the oil-sands-driven economy.

In particular, critics said the Tories have not addressed infrastructure development, over-burdened public services and the rising cost of living.

In response to this criticism, the Alberta government produced a 20-year strategic capital plan on Jan. 29.

The plan aims to increase infrastructure investment in highways, railways, hospitals, schools and low-income housing.

“Minister of Finance Iris Evans is being very conservative with this budget, especially when you look at the assumptions made for oil, which is at $87 barrel.

The price of a barrel of oil is going up at astronomical rates”, said Bill Stewart, vice president of Merit Contractor Association in Alberta.

“I think they have built some flexibility into the budget, because the forecasts are conservative on the revenue side. This will create an unbudgeted surplus, which will allow more money to be funneled into capital spending.”

In Budget 2007, the government established a policy to allocate unanticipated in-year increases in the available cash surplus.

Two-thirds of the increase was allocated to capital, with capital maintenance and renewal as the priority.

The 2008 budget plans to spend $37-billion. The capital plan for 2008-11 will invest $22.2 billion into the construction of roads, schools and health-care facilities.

The announced $22.2 billion is a 21 per cent increase in capital spending over last year’s three-year plan. The plan will spend an average of about $7.4 billion per year, up from an average of $2.7 billion per year from 2000 to 2007.

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