Premier Jason Kenney says Thursday’s budget will cut program spending by a total of 2.8 per cent over four years.
He expects the civil service will shrink by somewhat less than 10 per cent in the same period, with some layoffs.
And benefit payments from some programs will be de-indexed — meaning the amounts will stay the same, but payments won’t rise with inflation.
All that came out Wednesday in Kenney’s televised speech to the province, and also in a revealing interview before the TV address.
Kenney wouldn’t reveal the big budget numbers — the size of the deficit, for instance — but he was frank about spending plans.
In the interview, he repeated that health and education are exempt from cuts to operating spending.
And he added: “We’ve also protected spending in the child and community services that deals with the most vulnerable.
“If you add up health and education, plus child and family services and community services, you’re talking about nearly 80 per cent of the provincial budget, which means that the savings have to be found in the other 20 to 25 per cent of the budget.
“So there are some tough decisions for all of the other ministries.”
Eighteen of them — including Kenney’s own executive council — will face a total cut of about $1.3 billion.
Kenney notes that all these figures, including the overall 2.8 per cent cut, are four-year totals, not single-year cuts.
Current operating expense is about $48 billion a year. The most recent deficit was $6.7 billion. Kenney has pledged a balanced budget in four years.
He said that although no ministries will be abolished, “We will be reducing the number of senior and middle managers in the public service to achieve savings without consolidating ministries.
“Overwhelmingly, the reductions of the size of the public service will be achieved through attrition, that is to say not replacing people who retire.
“But there will be some layoffs — that’s unavoidable when you’re achieving savings. We don’t relish any of this. But we can’t kick the can further down the road anymore.
“It’s less than a 10 per cent reduction in the size of the civil service over four years.”
In a move likely to be controversial, Kenney said “there will be a partial de-indexation of a number of government programs and tax expenditures.”
Asked specifically about AISH (Assured Income for the Severely Handicapped), Kenney said benefits will not be cut, but also won’t rise with inflation over the four-year period.
This isn’t onerous, he said, because “we’re looking at inflation of barely over one per cent right now.
“This is an area where we can achieve hundreds of millions of savings without actual cuts by using de-indexation right across the board. Stay tuned for details in the budget, but we’re using de-indexation as a very careful way of getting major savings without cutting programs.”
He also noted that spending for mental health, addictions and some social programs for the most vulnerable will increase.
“We don’t take any pleasure in reducing spending anywhere, but you know what? We spend 20 per cent more per person than the average among Canadian provinces, and we’re getting worse outcomes in many areas, from health to education.
“I think Albertans should be ticked off that we pay more to get less. It’s totally unacceptable. Even if we didn’t have this fiscal crisis, we should be finding ways to be at least as efficient as the other provinces.”
The premier expects pushback but said he won’t be deterred.
“I don’t think the public is going to be very sympathetic to the usual protests by the usual interest groups.
“We are absolutely determined about getting this done. No number of protests, no hysterical attacks from the NDP, are going to set us off course here.
“What is their alternative — do they want us to run Alberta on a credit card forever? How many billions are they prepared to waste on interest payments? Or, whose taxes do they want to raise, and how many jobs are they prepared to kill by doing so?”
Kenney said he’s concerned about a possible global recession that could further reduce revenues and force more cuts later.
“The election results in Ottawa demonstrated that we must be resilient . . . we cannot enfeeble ourselves in the future with a massive debt that leaves us even more exposed to future downturns and to bad Ottawa policy.”
Finally, Kenney said there will be cuts and delays to capital spending as well, although the budget remains high compared to other provinces.
“When you decide not to cut health and education, which are two-thirds of the budget, you’ve got to find the savings from somewhere else. That would include better cash management when it comes to capital spending.”