The Alberta government has introduced a budget with a $4.7 billion deficit for fiscal 2009-2010.

A total of $8.9 billion in deficits are projected for this fiscal year and the two following years, with a return to surpluses in the 2012-13 fiscal year, Finance Minister Iris Evans announced Tuesday as she tabled the budget in the legislature in Edmonton.

The projection for next year depends on the province finding another $2 billion when the budget is put together.

Government revenues have declined 11% to $31.7 billion, with expenses estimated at $36.4 billion. The revenue drop is mostly due to a decrease in the money the government makes from resources. Resource revenue is down by half, or $6.4 billion, while while income tax revenue is forecast to fall by $1.4 billion.

The government plans to spend $7.2 billion this fiscal year on infrastructure projects, such as health facilities, schools and roads, with total spending of $23.2 billion over the next three years.

Funding for the development of carbon capture and storage technology is still going ahead, with $100 million committed for fiscal 2009-10, and a total of $800 million over three years. The $2 billion previously announced for the fund remains intact, with spending spread out over 12 years.

The government also announced $215 million in spending cuts, including decisions to no longer cover chiropractic services and gender reassignment surgery for new patients. The budget cuts municipal project funding by 25%, or $100 million.

People who receive benefits under the province’s Assured Income for the Severely Handicapped (AISH) will see an increase of $100 a month, from $1088 to $1188. Seniors’ provincial benefits will also increase, $40 a month for single people and $60 for couples.

As for taxes, the budget includes immediate tax increases for alcohol and tobacco, and higher education property taxes.

Amendments to Fiscal Responsibility Act

The government also announced amendments to the Fiscal Responsibility Act. The amendments allow the government to borrow for capital projects and allow deficits to be offset by transfers from Alberta’s Sustainability Fund, which will now also include money from the province’s capital accounts.

The province plans to dip into the Sustainability Fund to make up this year’s budget shortfall.

For the first time in many years, the government plans to borrow to finance capital projects, with $1.1 billion a year planned over the next three years.

IE