After one absorbs all the details about the 2013 Alberta budget, one thing remains clear: budgets are a messy business and there is absolutely no pleasing everyone. A budget reflects the priorities of a government through the choices — albeit tough ones — made on how to spend and what to cut. In 2013, Redford made it known that post-secondary education is not a serious priority for the Alberta government.
In total, universities in Alberta are being faced with a 6.8 per cent decrease in their operating grants despite the fact that they were promised a 2 per cent increase in 2012. In reality, this is an absolutely devastating 9 per cent cut across the board. These cuts are not restricted to only the University of Calgary and the University of Alberta, they affect every post-secondary institution in the province including SAIT and NAIT. These cuts also come at a time when some Alberta universities are in need of an increase in funding just to cover expenses.
The U of A estimated that it would need a 4 per cent increase in spending to simply cover inflation. The U of C was promised $142 million to expand the Schulich School of Engineering and will now receive only $42 million spread out over five years. Similarly, Mount Royal University is now $55 million short on their planned Library and Learning Centre. Also, the $650 million over three years committed by the Redford government for post-secondary construction projects are now certainly on the back burner.
What is perplexing about this budget is that the government is clearly willing to spend despite the bleak predictions of province- wide belt-tightening. Alberta is going to borrow $12.7 billion over three years for capital projects. The spending promised by the budget also comes with the guarantee that there would be no increase in taxes, a campaign promise of Redford’s.
Currently, Alberta’s large corporate tax rate is 10 per cent, which — along with New Brunswick and British Columbia — is the lowest in the nation. If the Alberta government were to raise the corporate tax rate to the level of Ontario’s 11.5 per cent, or even Saskatchewan’s and Manitoba’s 12 per cent, it is estimated that up to $2.7 billion in revenue could be generated by the province.
The value of the resources that represent a large portion of our province’s revenue is extremely volatile. A possible hedge against this volatility would be a consistently fair taxation system that could generate revenue. Due to the falling price of bitumen, which is still currently over $600 per cubic metre, Alberta is predictably experiencing a revenue shortfall — one that could be mitigated by the introduction of fair corporate taxation. However, in Albertan politics, raising taxes is akin to denying the Holocaust — any party that pledges to do so willingly forfeits their chance at being elected. Time and again, Premier Redford pledged that she would not raise taxes — she kept her promise and demonstrated the priorities of her party.
It is entirely unreasonable to take raising any sort of tax off the table. Any province — especially one so inextricably linked to nonrenewable resources — must be flexible enough to change their policies in order to meet new economic challenges and taxation is one of the most important weapons in their revenue-generating arsenal. While it is true that no one enjoys the thought of new taxes, it makes more sense to adjust our taxation to the levels of the rest of the country than to damage the institutions that train the future leaders of our province.
Some suggest that any increase in corporate taxation would simply cause businesses to leave the province entirely for foreign markets. While the industry will do its best to scaremonger the public into believing that it will pack up and go at a moment’s notice, consider their options. The resource that sits in our soil is valuable — very valuable. It seems unlikely that any company that would pack up over a 1 or 2 per cent increase in taxation would rather incur the expense of relocating their operations.
Post-secondary education addresses a very different type of resource, one that is extremely valuable and difficult to quantify. If Alberta wishes to be prosperous for the “next 20 years,” as stated in the budget speech, it will need the best and brightest Albertan minds to stay in the province. The idea that Alberta could lose students — future engineers, technicians, researchers etc. — to other provinces should make post-secondary education a priority for the government rather than a target for greater “efficiencies.”
Gallingly, during the budget announcement, Minister of Finance Doug Horner noted that, “Post-secondary education remains a key priority area for our province, and we will continue to support post-secondary students.” No matter how the Redford government would like to appear, the cuts demonstrate, in no uncertain terms, that when faced with making tough decisions, cuts to post secondary-education are an easy choice.