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Analysis

Jason Kenney’s Budget Cuts $1.3 Billion in Health, Education and More To Pay For Corporate Tax Cuts

These and proposed cuts could have real economic consequences, perhaps even triggering a “'Kenney recession'

After spending $4.5 billion on tax cuts for Alberta’s most-powerful corporations, the United Conservative Party government’s budget cut $1.3 billion worth of jobs, services and supports for cities, schools, hospitals, and more — likely at serious economic cost.

A key item in the budget is a proposed operating expense cut of 2.8% over 4 years, much of which is to be achieved by reducing the public sector 7.7%. To achieve this, the Kenney government carefully notes both attrition and layoffs are on the table. It follows Kenney’s inner circle repeatedly insisting Alberta’s public sector workforce is disproportionately large and over-compensated — which likely isn’t true. 

The budget also adds only 1% to the health budget, despite 1.4% average inflation — likely amounting to a real cut.

Meanwhile, it freezes education spending until 2022 — despite expected, annual enrollment increases of 15,000 students.

And, the budget forces post-secondary institutions to take a 5% cut from last year’s funding — on track for a four-year, 12.5% cut of over $300 million. This includes cuts to key research and infrastructure grants.

In an e-mail to faculty, obtained by PressProgress, University of Calgary President Ed McCauley wrote the budget will force the university to simultaneously make cuts while increasing tuition.

“There will be a 6.9% ($32.9M) cut to UCalgary’s Campus Alberta grant in this 2019-20 fiscal year,” McCauley told faculty, “and our Infrastructure Maintenance Program (IMP) funding, which was $22.5M last year, has been reduced to zero on a one-time basis this year.”

He added the budget also scraps tuition freezes, pushing universities to adjust for cuts by raising fees up to 7%, for three years.

That would force students to pay over a thousand dollars in new tuition fees, with less support through the education tax credit and student tax credit.

Writing in The Gateway, the University of Alberta’s student newspaper, Adam Lachacz noted average student loan payments will also increase, starting in April.

Meanwhile, Alberta’s cities are scrambling to accommodate $236 million worth of cuts that have put infrastructure projects in jeopardy in Edmonton and Calgary.

Economist Hugh Mackenzie wrote these and proposed cuts could have real economic consequences — perhaps even triggering a “Kenney recession.”

Mackenzie projected the cuts advised in the MacKinnon report Kenney commissioned could constrict GDP 4.8% and cost 113,500 private and public sector jobs.

Mackenzie told PressProgress “the budget is the same as MacKinnon — perhaps a bit worse,”

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