SMITH OPENS UP THE PUBLIC PURSE
Premier banks on surplus in promising billions to address the school shortage
Premier Danielle Smith is uncorking the Alberta treasury for one of the biggest capital project announcements in Alberta's history.
The UCP will pump $8.6 billion over three years into the construction of new schools, aiming to provide 50,000 new student spaces over that time.
She hopes to create another 150,000 new spaces in the four years after that.
The current capital budget for schools is $2.1 billion over three years. The government now adds $6.5 billion in new money.
Smith holds the Trudeau Liberals responsible for the school shortages and much else.
In a TV address to the province, she blamed the Liberals' immigration policy for straining services in Alberta and across the country.
“These historically high immigration levels — especially as it relates to those with temporary visas — is exacerbating shortages in housing, job opportunities for young people, as well as health, education and other social services ... So, I am joining with other premiers across our country in calling on the current federal government to immediately reintroduce sensible and restrained immigration policies, similar to levels we saw under Stephen Harper.”
Hitting a cultural hot button, the premier said Alberta welcomes newcomers “who believe in working hard, protecting our freedoms, contributing to society, following the rule of law, and who have a deep respect for other cultures and faiths different from their own.”
The Liberals have often allowed high immigration levels on the theory (and often the reality) that newcomers would vote for the party that welcomed them.
Current polls show no such benefit for Prime Minister Justin Trudeau and his party, but the high rate of immigration continues.
Today, these levels are simply unsustainable. They're even unfair to immigrants, who quickly face housing shortages, high rents, inflated prices, challenged health care and packed schools.
But immigration is by no means the sole cause of the school shortages. Provincial governments have lagged behind demand for at least two decades.
Complex rules often stall projects for years. Education Minister Demetrios Nicolaides says the province will change a system that often means a school has to go through three annual budget cycles before it can be completed.
The premier's overall goal is worthy, but the size of this announcement is shocking.
There hasn't been anything remotely like it since July 8, 2008, when then-premier Ed Stelmach announced $4 billion in new money for carbon capture and storage, as well as green transit projects (Green Trip, he called it).
Stelmach was lured into this splurge by oil prices that were running above US$120 per barrel, the highest level ever.
Then the great world financial crisis hit.
Within six months of his announcement, oil was selling for $40 per barrel. Alberta finances were in shambles for years thereafter.
Smith is taking the same kind of chance, largely because the province is expected to book a $2.9-billion surplus this year.
That estimate was based on an average oil price of $76 per barrel. On Tuesday, West Texas crude was running at about $71 per barrel.
Late last year, Smith and her finance minister, Nate Horner, were warning of looming deficits. They used the pretext to defer the income tax break they promised until 2027.
Smith now signals that she'll bring the tax break back, much sooner than 2027. That would cost the treasury another $1.4 billion that isn't in the current budget.
There's bound to be controversy over funding for public charter schools, and non-profit private schools as well.
Nicolaides says $600 million will be aimed at such schools over the three years, while the full public sector will get $8 billion. That hardly looks like a move to eliminate public education (although some in Smith's own party want exactly that).
Smith might just win her bet and solve the school shortage without throwing finances into more turmoil and debt.
But she is committing a shocking whack of cash.
Other struggling sectors, especially health care, will justifiably shout, “What about us?” while fiscal conservatives will say, “What the hell?”