Article

Big spending, but will it last?

VCC’s policy and research specialist Lee Stevens reflects on the 2023 Alberta Budget

23 March 2023

Stacks of Canadian money

On February 28, Minister of Finance Travis Toews unveiled Alberta’s 2023 Provincial Budget. The budget included multiple investments in some key Enough for All priorities, including indexation of income support programs, addressing workforce challenges in the homeless-serving sector, mental health, and affordable housing. In this blog post, we take a closer look at what these funding announcements will mean for poverty in Calgary.

What was announced?

The government made several funding announcements for the social service sector before the release of Budget 2023, including:

Budget 2023 also increases spending in healthcare by over $2 billion dollars for a total of $24.5 billion. This investment will support “the training, and recruitment of more health care professionals,” reduce wait times for mental health and addiction services and increase access to addiction recovery-oriented services. Areas like education also received a boost in spending, the operating expense for the Ministry of Education increased by 5.2% or $1.8 billion for teachers’ salaries, a school nutrition program, and support to hire up to 3,000 education staff among other initiatives.

Investments in affordable housing

Prior to the release of the budget VCC, along with members of the Social Policy Collaborative (SPC), shared our priorities for the budget including:

  • An additional $90 million per year commitment to deliver on the province’s promised new affordable housing units,
  • A full review of active operating agreements to provide insights into how funding should be increased for the affordable housing serving sector, and
  • An immediate 10% increase and commitment to fully index existing operating agreements to inflation.

Budget 2023 addresses two of these three recommendations by investing:

Evidence shows moving people from houslessness to being housed is positively associated with a stabilization of mental health symptoms, and a decrease in interactions with police and hospital emergency rooms.  This new funding will go a long way to improving affordable housing in our province and we’re pleased to see the government moving on these important actions brought forward by the SPC.

Investing in income support programs to address food insecurity

Budget 2023 announced $10 million for Alberta food banks and other civil service agencies to support food security for Albertans. It’s the investments in income support, however, that will have a bigger impact on food insecurity. According to PROOF’s sixth report on food insecurity, one of the most food insecure households are social assistance recipients. The report recommends “[money directed at food charity] should stop in favour of policies that better support the adequacy of incomes in vulnerable households.” With this in mind, we were very pleased to see that Assured Income for the Severely Handicapped (AISH), Income Support, and the Alberta Seniors Benefit will receive an increase of 6% in 2023, and future years will be indexed to inflation. However, more work is needed to ensure Albertans can meet their basic needs and are better supported to work while on income support. The SPC published a set of recommendations to improve the effectiveness of income support. In addition to indexing payments to inflation, there were also recommendations to increase the incentive to work and ensure that supplementary programs and services are available to Albertans in crisis, and as they work to increase self-sufficiency, including health benefits and access to training programs.

Overall, the 2023 Alberta budget is expected to have a positive impact on the health, well-being, and affordability of Albertans. The increased funding for healthcare, mental health services, and affordable housing, are positive steps in the right direction.

But will it last? Despite repeated calls to diversify the economy, Alberta remains the lowest taxed province in Canada and Budget 2023 continues our over-reliance on resource revenues. What’s more, the budget promises a “new fiscal framework” to require balanced budgets and limit spending to inflation and growth. Even though future budgets may not meet that threshold. Consider, for instance if oil prices fall again, the sustainability of funding for many public services including healthcare, education, and affordable housing are called into question as the government of the day will be forced to either increase taxes or cut spending.

Choices made through the budget must prioritize the well-being of people to minimize the long-term costs of poverty. We are two months away from a provincial election and it remains to be seen if this level of spending will be maintained in future budgets. We'll be monitoring the implementation of these funding announcements in our local communities and we hope you will too.

Resources

Adequate income support is critical

Adequate income support programs are a critical part of the community’s social safety net. They complement and fill the gaps when well-paying employment is currently unavailable or for people unable to work full-time hours or at all.

Levers

Attribution