Budget 2015 brings four per cent cut to PSE funding over two years, offers increased student aid

With crude oil prices plunging by nearly 50 per cent since last summer, Alberta will be facing an estimated $5 billion revenue deficit — the largest in the province’s history.

Minister of Finance Robin Campbell announced the revenue shortfall at Thursday’s Budget 2015 announcement, which is forecasted based on the tumbling price of oil currently valued at $58.84 per barrel, down from $79.87 per barrel in 2014–15.

Budget 2015’s consolidated revenue is estimated at $43.397 billion with a consolidated expense of $48.338 billion. The Alberta government is also expecting a $3 billion deficit the following fiscal year. They aren’t anticipating a return to surplus until 2017–18, with $709 million.

Alberta saw a $3.1 billion deficit in Budget 2013.

Albertans are now “faced with a lifestyle and household expense we can no longer afford,” Campbell said.

“We understand that Alberta is in a vulnerable position,” Campbell added. “I’m confident the various ministries will accomplish this difficult task in a combination of ways.”

With Budget 2015, the provincial government will implement a five-year plan alongside Premier Jim Prentice’s 10-year Strategic Vision announced earlier this week, which outlines his main goals of “strengthening Alberta’s fiscal foundation, building a lasting legacy and securing Alberta’s future.”

The five-year plan will work with Alberta post-secondary institutions to help facilitate a sustainable model to cut back on the system’s reliance on government funding.

The Alberta Ministry of Innovation and Advanced Education’s consolidated expenses are budgeted at $5.81 billion in 2015­–16, a one per cent reduction from the 2014–15 forecast of $5.86 million and will be “essentially flat” for the following three years.

The government is anticipating Innovation and Advanced Education’s consolidated expenses to sit at $5.84 billion in 2016–17, $5.86 billion in 2017–18 and $5.84 billion in 2018–2019.

Alberta Minister of Innovation and Advanced Education Don Scott said Albertans deserve a post-secondary system that provides them the tools to succeed and help the province meet its future goals.

“Budget 2015 will help create a post-secondary system based on excellence, financial sustainability and accessibility,” Scott said.

The Campus Alberta grant will be reduced via a “phase-in” process, diminishing by $28 million (1.4 per cent) in 2015–16 and by $60 million (2.7 per cent) in 2016–17.

Student aid will be “significantly enhanced,” Scott said. Student aid will be bumped up to $227 million in 2015–16, up $14 million (6.6 per cent) from the $213 million forecasted in 2014–15. Budget 2015 also includes $83 million in merit-based scholarships, which will be awarded to 47,500 students, $57 million for the costs of providing student loan and student debt management programs and $51 million in grants for 16,000 students.

The government will also be expending $579 million in student loans, up $171 million from 2014­–15 due to student loan limits and living allowances being increased in 2015–16.

The elimination of the tuition cap — which prevents continually escalating tuition costs — was floated around by the government earlier this year, but was not addressed by Campbell in Budget 2015.

Prentice said the government’s five-year plan should provide Albertans with long-term and immediate action to “get us on the right path immediately.”

“We have told Albertans that tough decisions would be needed and Budget 2015 reflects a balanced approach that will see us return to surpluses within three years,” Prentice said.

“The budget is the first step in a long term strategy.”