Alberta Budget 2015: What you need to know

Low oil prices have affected the pocketbooks of many Albertans, and the same goes for the provincial government.

• 'Right budget at the right time,' Alberta finance minister says

With billions of dollars in decreased oil and gas revenues, the province is expected to post a $6.1 billion deficit this year.

But that number isn't stopping Alberta's NDP government from increasing spending. The plan unveiled in today's budget will see provincial debt increase to $36.6 billion by 2018which includes borrowing almost $4 billion tocover Alberta's operating expenses in that timeframe, something that hasn't happened since 1994.

To do so, the government will impose adebt limit of15 per cent of the province's gross domestic product (GDP)when it introduces amendments to the Fiscal Management Act in the near future.

While the province plans to increase spending on both the operational and capital sides of the budget, it also plans to exhaust Alberta's contingency fund and boost revenueswith help from new taxes to cover its costs.

The goal is to return to balanced budgets by spring2020, which means the province won't be adding any moreto its sizable debt. But what does the budget actually mean for the average Albertan?

1) Sin tax hike

The province is planning to increase taxes on tobacco and liquor for the second time this yearstarting at midnight Tuesday:

• Tax on carton of 200 cigarettes will rise $5 to $50.
• Tax on loose tobacco to rise 3.75 cents to 37.5 cents per gram.
• Tax on cigars will be increased to 129 per cent of the taxable price of the cigar, with a minimum tax per cigar of 25 cents and a maximum of $7.83.
• Five per cent increase to liquor markup.
  • $0.18 for bottle of wine of spirits.
  • $0.21 for a case of beer.

The province will also keep the proposed 35 per cent on average increase to fines for speeding, running a red light or failing to stop at a stop sign that was part of the budget tabled in March under the former PC government.

While the gas tax will also remain the same as the hike in March, and is still the lowest in the county, the government is planning to increase the locomotive fuel tax by four per cent which will affect rail transport and could eventually trickle down to the consumer.

Increases to camping fees took effect before the start of the last season. Insurance premium tax rates will also go up by one percentage point.

But there are some breaks for the average Albertan. The NDP is following through on their promise to scrap health-care levies, and proposed Tory fee hikes to mortgages and land transfers.

2) Corporate tax hike and end of flat income tax

While Alberta will continue to have no provincial sales tax, the province affirmed the abolition ofthe flat income tax model which is slightly different than what was proposed by the PCs in March. A small increase started for those who make over $125,000 this October, but will increase again starting on Jan. 1, 2016.

"No jurisdiction in Canada at any level and under any party including the recentlydefeated Conservative government in Ottawa followed this income tax model because it is wrongheaded, grossly regressive and unfair," said Finance Minister Joe Ceci in his budget speech.

The general corporate income tax rate was increased from 10 per cent to 12 per cent on July 1, 2015 a change that promises to bring in $250 million this year, and up to $450 million the following year.

3) Business tax credits

In the months leading up to today's budget, the province said it would focus on job creation, which was reinforced last week when Premier Rachel Notley announced the new portfolio of Economic Development and Trade withroughly $279 million in operating costs next year and slight increases over the next two years.

The goal is to diversify Alberta's economy, and not just in oil and gas but also other industries like agriculture. The provincial unemployment rate is expected to go up next year, but Alberta's economy is expected to return to normal growth in 2017.

Along that theme, there is a new job creation incentive program will provide $89 million each year to employers with the goal of creating 27,000 positions annually.

The grants up to $5,000 will be provided on a first-come, first-served basis and will be broken down into small, medium and large corporations. After the program wraps up in two years, it will be reviewed.

The province also promised to continue to grow and provide loans for small- and medium-sized companies, and will be providing funding to ATB Financial and the Alberta Enterprise Corporation for that purpose. It comes as Alberta's firsthike was implemented this Octoberon the road to a $15 minimum wage.

4) Funding for families and seniors

There will be $120 million over two years starting in 2016-2017 for new long-term care spaces, and also $90 million over the same period to expand public homecare.

• Generation Squeeze says increased spending on Alberta's seniors would impact youth

The NDP government also says it will keep its promise on child-care funding, although it may come a little later than planned. There is $297 million budgeted this year for child-care programs, and the budget outlines $175 million in new funding to increase access and affordability while moving towards $25/day child care in Alberta.

The province is also introducing a newAlberta Child Benefit of up to $2,750 per family to help families with incomes lower than $41,220. The Alberta Family Employment Tax credit is also being expanded for working families.

There is also $25 million in new funding for Family and Community Support, which provides social services to 319 municipalities and Mtissettlements, and the budget earmarks the $15 million recently promised to support women's shelters.

The province is also boosting spending on education by keeping its promise to fund new school enrolment. Roughly 380 more teachers and 150 more support staff have also been promised over three years, as well as more support for students with special needs.

The budget also includes $20 million in 2016-17 and $40 million in 2017-18 tophase-in a targeted school nutrition program, and there is also a plan to rollback school fees but not until 2016-17, when up to $45 million in savings will be provided to parents.

Roughly $3.8 billion has been earmarked for school constructionover the next five years including 200 new builds and modernization projectsbut the province already announced the completion of many projectswill be delayed.

The province also announced a freezeon post-secondary tuition for next two years at cost of $167 million, and increase in student aid or student loans.

5) Increased infrastructure spending

The province says a 15 per cent increase to the capital plan will put $4.5 billion more towards fixing roads, building schools and expanding hospitals over the next five years.

• $4.7 billion for roads and bridgesincluding Edmonton and Calgary ringroads and highways 63, 28 and 19.
• $387 million for rural and urban sustainable housing renewal.
• $926 million for flood mitigation, including $297 million announced Monday, but some of the funding is expected to be recoveredfrom the federal government.
• $830 million for the Calgary Cancer Centre, which is now expected to open in 2024 a delay from the previous announced date of 2020. The final cost of the project will be tallied when the project is tendered.
• $20 millionfor the redevelopment ofthe Misericordia and Royal Alexandra hospitals.

The infrastructure plan was created with advice from former Bank of Canada governor David Dodge. He says in his report it's best to spend in a bad economy and save in the good times.

Dodge also recommended the province seriously consider tolls on the ring roads in Calgary and Edmonton, but it's a road Ceci says he's not willing to travel.

• Here is a look back at Alberta's budget history

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