2020-23 Fiscal Plan (Alberta Budget 2020)

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2020-23 Fiscal Plan (Alberta Budget 2020) BUDGET 2020 Fiscal Plan A Plan for Jobs and the Economy 2020 – 23 Alberta Treasury Board and Finance Communications 9th floor, Edmonton Federal Building 9820 – 107 Street NW Edmonton, Alberta, T5K 1E7 Telephone: 780 427-5364 Toll-free within Alberta: 310-0000 then 780 427-5364 [email protected] For electronic copies of Budget 2020: Fiscal Plan visit our website at: alberta.ca/budget-documents.aspx ISBN 978-1-4601-4716-0 (Print) ISBN 978-1-4601-4717-7 (Online) ISSN 2369-0119 (Print) ISSN 2369-0127 (Online) Copyright © 2020 President of Treasury Board and Minister of Finance and its licensors. All rights reserved. BUDGET 2020 GOVERNMENT OF ALBERTA | 2020 –23 2020 –23 Fiscal Plan PRESENTED BY TRAVIS TOEWS PRESIDENT OF TREASURY BOARD AND MINISTER OF FINANCE in the Legislative Assembly of Alberta February 27, 2020 Accountability Statement The government’s Fiscal Plan for the three years commencing April 1, 2020 was prepared under my direction in accordance with the Fiscal Planning and Transparency Act and the government’s accounting policies. All of the government’s policy decisions as of February 14, 2020 with material economic or fiscal implications have been considered in preparing the three year Fiscal Plan. Original signed by Travis Toews President of Treasury Board and Minister of Finance February 14, 2020 2 Fiscal Plan 2020 – 23 Fiscal Plan 2020 – 23 Overview ................................................................ 5 A Blueprint for Jobs ........................................................ 23 Economic Outlook ......................................................... 49 A Fair Deal for Alberta ...................................................... 83 Revenue ................................................................. 99 Expense ................................................................. 119 Capital Plan .............................................................. 147 Tax Plan ................................................................. 167 Debt .................................................................... 189 Fiscal Plan Tables .......................................................... 205 Response to the Auditor General .............................................. 223 Note: Amounts presented in tables may not add to totals due to rounding. Fiscal Plan 2020 – 23 3 BLANK PAGE 4 BUDGET 2020 GOVERNMENT OF ALBERTA | 2020–23 Fiscal Plan Overview 5 Table of Contents Overview . 7 A Plan for Jobs and the Economy . .. 7 Open for Business . 8 Standing Up for Alberta . 10 Making Life Better for Albertans . 13 Investing in Infrastructure . 15 Revenue . 16 Expense . 17 Energy and Economic Assumptions . 18 Risk Management . 19 Deficit and Debt . 20 Fiscal Summary . 22 Note: Amounts presented in tables may not add to totals due to rounding. 6 Overview | Fiscal Plan 2020 – 23 Overview A Plan for Jobs and the Economy Budget 2020 takes a measured approach to fiscal management focused on getting Albertans back to work, making life better for Albertans, and standing up for Alberta . This budget provides the means to effectively and sustainably deliver public services, and enable job creation by using all tools at the government's disposal to support private sector growth . Alberta has been challenged by difficult economic times and a slow recovery since 2015 . This budget, like Budget 2019, reflects the choices we are making to ensure the world knows Alberta is open for business . Albertans and Alberta businesses will continue to pay less in overall tax than any other province . The corporate tax rate will continue to be reduced as promised, and we continue to fight for market access for our resources, and a fair return for Alberta’s financial contributions to Canada . With tax competitiveness, reductions to red tape and a renewed focus on investment attraction, this government is demonstrating its commitment to the long-term sustainable growth of Alberta’s economy . This budget provides sustainable and appropriate funding for public services including health, education, and social services . The spending in these areas accounts for 76 per cent of the total expense as we maintain front-line public services for those who need them most . This commitment is coupled with a drive for the efficient use of taxpayer resources and bringing costs for government services in line with the national average over the next three years . Budget 2020 reflects increases in operating expense over Budget 2019 for agencies, boards, and commissions, including post-secondary institutions . This increase in expense is fully off-set by revenue . This is in line with the MacKinnon Panel recommendation to expand revenues from sources other than provincial grants . We continue to address Alberta’s financial debt responsibly by keeping expenses in line with expected revenues . Fiscal success will be a product of both financial discipline, and our success in attracting investment for economic growth and job creation . Overview | Fiscal Plan 2020 – 23 7 pdf named: B20_FP_OVW_kfm_tb.pdf Budget 2020 Overview Section Budget 2020 ‐ Key Fiscal Metrics Budget(billions of 2020dollars) – Key Fiscal Metrics (billions of dollars) 2018-19 2019-20 2020-21 2021-22 2022-23 Actual Budget Forecast Estimate Target Target Revenue 49.6 50.0 50.9 50.0 54.0 58.1 Expense Operating expense 48.4 48.2 48.6 47.8 47.5 47.4 Other expense 7.9 8.3 8.6 8.3 8.6 8.9 Surplus / (Deficit) before provisions and allowances (6.7) (6.5) (6.3) (6.1) (2.0) 1.9 Crude-by-rail provision - 1.5 1.3 - - - Contingency and unallocated disaster assistance - 0.7 - 0.8 0.8 0.8 Revenue forecast allowance - - - - - 0.5 Surplus / (Deficit) (6.7) (8.7) (7.5) (6.8) (2.7) 0.7 Other Key Metrics: Capital / Other Non-financial assets 53.9 54.6 54.7 56.0 56.9 57.2 Heritage Fund Year-end Balances 16.0 16.2 16.2 16.6 16.9 17.2 Taxpayer Supported Debt 62.7 71.8 67.9 76.9 82.9 87.8 Total Debt 80.8 90.2 86.0 95.6 101.9 107.4 Net Financial Debt 27.5 36.6 35.6 43.6 47.1 46.6 Net Financial Debt to Nominal GDP Ratio 8.0% 10.2% 10.2% 12.1% 12.3% 11.5% Taxpayer Supported Debt to Nominal GDP Ratio 18.2% 19.9% 19.4% 21.3% 21.7% 21.7% Note: See table on page 22 for amounts in millions. pdf named: B20_FP_OVW_kfm_tb.pdf Open for Business The government’s economic reforms will continue to centre on improving our Alberta has abundant natural economic fundamentals and attracting investment . Our focus continues to be resources, a pristine environment, enviable living standards and a on transforming an over-regulated economy into one that is more efficient, well-educated and highly-skilled flexible and open . The priority for this government is growth of the private workforce. sector, which is the engine of growth for creating jobs, increasing trade and generating tax revenue . Supporting Investment and Jobs Budget 2020 continues to lay the foundation for viable and sustainable economic growth . Actions in this fiscal plan include: • Continuing to reduce the corporate income tax rate from 12 per cent to eight per cent in under three years so businesses can grow and create more jobs . • Returning to a low-rate, broad-based tax approach that supports the whole economy and encourages sustainable economic diversification . • Supporting pipeline projects and continuing to work with partners to improve egress to get our natural resources to global markets . • Modernizing our regulatory environment to reduce the burden on job creators . S:\TBF\MinShare\PublnsProd\CorpFin\OBM.PUBLNS‐2020‐21\B20_Fiscal‐Plan_vol\01_Overview_B20\Source docs\ Bud20_FP_Overview_tables/ Key Fiscal Metrics Last update: 2/19/2020 /3:12 PM 8 Overview | Fiscal Plan 2020 – 23 The intent is to limit the number of industries supported by ongoing Alberta boasts popular tourist government subsidies, and reduce corporate taxes overall to improve the cost destinations, stable and reliable competitiveness of all sectors . government and institutions, highly The government is focussed on investments and exports, and promoting the sought-after education facilities, a world-leading service sector and province around the world to attract more business investment to Alberta . highly competitive industries. Specifically, the government: • Confirmed its $1 .1 billion commitment to the Petrochemicals Diversification Program . This will attract large-scale projects by providing royalty credits to companies that build facilities to turn ethane, methane and propane feedstocks into products such as plastics, fabrics and fertilizers . Royalty credits are issued once projects become operational . • Eliminated barriers to domestic free trade and supporting internal trade to support all industries . • Will introduce an Investment and Growth Strategy that will focus on areas of comparative economic advantage in our resource-based industries of New investment support services, based on advice and input from job energy and agriculture, and in other sectors that fuel momentum and creators themselves, will lead to growth in the provincial economy . These include forestry, technology, data more investment. and telecom, tourism and financial services . This strategy includes $75 million over the next three years to boost Alberta’s attractiveness to global investors and support investment attraction . • Tasked Alberta Innovates to support research, innovation and commercialization to develop and advance talent, to grow sectors, and to leverage funding from partners and the private sector with more than $184 million . Making it easier to do business Unnecessary red
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