UCP fiscal plan far from an 'austerity budget,' economist says

In spite of cuts looming for post-secondary education and enough fiscal prudence to anger Mayor Naheed Nenshi, a Calgary economist said the United Conservative Party's newly-unveiled budget promises only a modest spending reduction for the province.

Trevor Tombe, an associate professor of economics at the University of Calgary, said the long-awaited budget — which shrinks spending on operations in Alberta by 2.8 per cent over four years — is less of a reduction than what was anticipated.

"I'd say that this is not an austerity budget. Some areas of government are seeing increased spending, other areas a freeze, and some, such as post-secondary, a reduction," Tombe said.

"For perspective, if we go back to the Ralph Klein budget starting around 1993, 1994 — that was a 21 per cent reduction in program spending at that time, so it's night and day by comparison."

Tombe said in addition to being comparatively modest, the plan laid out by the UCP upholds its platform promise to balance the budget and does account for some spending increases. 

"[The UCP's] campaign commitment was to hold spending roughly flat, in particular in health and education, and that's exactly what this budget did," Tombe said. "In fact, health spending is set to grow over the coming years."

Tombe did acknowledge that some industries would be directly affected by the budget cuts, and those industries could soon be facing "really difficult decisions."

"The main ministries that are seeing more significant reductions are post-secondary institutions … [and] certain areas of government will shrink dramatically — agriculture and forestry in particular," Tombe said.

But the impact of those cuts, Tombe said, won't be truly understood until they come into effect and industries react accordingly.

"It'll be tough to know how it filters down and impacts individual programs, because that depends on a lot of nitty-gritty decisions that are made within the ministries," he said.

"Because the spending restraint that we're seeing is fairly modest — less than a per cent reduction over the coming year — I don't think there's going to be any near-term impacts that people see in their day-to-day lives."