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Alberta predicting $2.4-billion surplus for petro-powered economy – Canada News – Castanet.net
Alberta is predicting a $2.4-billion budget surplus for its petro-powered economy this year, with plans to take a big bite out of its debt and put up guardrails to prevent eye-popping deficits when oil booms go bust.
“This plan achieves the priorities of Albertans, which include ensuring the government lives within its means,” Finance Minister Travis Toews told reporters Tuesday before introducing the 2023-24 budget in the legislature.
“Our relentless focus on investment attraction, job creation and diversification has secured our position as the economic engine of Canada.”
It’s the first budget under United Conservative Party Premier Danielle Smith and the last before a scheduled provincial election in May.
The document hikes spending almost across the board, particularly in the key areas of health, education and justice.
There are billions of dollars for new schools, new roads and bridges, a new business school in Edmonton, more ambulances and Crown prosecutors and training in schools for in-demand fields like health, energy, business and innovation.
Many major spending initiatives were revealed in recent weeks, including $158 million to recruit and retain health workers and $243 million over three years to augment primary care to reduce emergency room bottlenecks.
The budget promises a cap on post-secondary tuition increases starting in 2024.
Toews said there would $1.8 billion over three years to fund kindergarten to Grade 12 enrolment, to reduce class sizes and to improve bus transportation.
There is a 12 per cent combined hike to the Justice and Public Safety budgets to pay for more sheriffs and prosecutors and more staff to clear courtroom backlogs.
The province is putting in almost $2 billion to top up the Heritage Savings Trust Fund nest egg to $20 billion. There are also to be legislative changes to let the fund keep all of its net income rather than allowing the government to withdraw a portion in certain circumstances.
Alberta, with a population of 4.4 million, is on track to take in $70.7 billion in revenue and spend almost $67 billion. Another $1.5 billion is being set aside for unforeseen spending emergencies.
Oilsands money remains the key driver, with bitumen royalties alone expected to bring in $12.6 billion.
Oil prices plunged into negative territory early in the COVID-19 pandemic only to rebound over the last 24 months as the global economy picked up and Russia’s invasion of Ukraine drove up prices.
West Texas Intermediate — the benchmark price for North American oil — is expected to remain strong at around US$70 and US$80 barrel in the coming years.
Alberta’s oil booms have allowed it to pay the bills while keeping the lowest tax regime in Canada along with no provincial sales tax.
However, as successive governments tied operational spending to the ups and downs of oil prices, oil booms have seen sky-high surpluses accompanied by equally head-spinning deficits during bad times.
Toews introduced a plan for legislated balanced budgets that can only go into the red when there are emergencies, such as COVID-19 or last-minute steep drops in revenue.
Even if such events occur, the government would have to get back into balance within two years. Spending increases would also be limited to inflation plus population growth.
Toews said it would be “far more than embarassing” if the government were to break its own balanced budget law.
“It would be a public spectacle and there would be a huge political cost to bear,” he said.
“Simply passing legislation around these fiscal rules provides real teeth in terms of the impetus for governments to follow them.”
The surplus for the fiscal year that’s about to end had been on track to be $12.3 billion but will now come in at $10.4 billion.
The change is to help pay for $3.5 billion in inflation-aid programs along with a new deal for physicians and wages in bargaining with public-sector unions.
The inflation aid programs have seen the province pause its portion of the gasoline tax and once again index personal income tax brackets to inflation. There are also rebates on electricity bills and direct payments for young families, seniors and those in need.
Economic indicators remain robust. Alberta’s real GDP growth is expected to rise 2.8 per cent to lead the nation.
Population growth is expected to rise by almost three per cent, the largest such increase since 2006.
The Opposition NDP has warned Albertans to beware UCP politicians bearing gifts on the eve of an election.
Finance critic Shannon Phillips noted that many of the givebacks — including the cap on post-secondary tuition increases, a freeze on auto insurance hikes, and tax and benefit re-indexation — reverse earlier decisions made by the same government.
Here are some of the highlights:
— A $2.4-billion surplus based on $70.7 billion in revenues and $68.3 billion in spending (including a $1.5-billion contingency fund).
— Taxpayer-supported debt is to fall to $78.3 billion.
— New fiscal framework legislation to mandate balanced budgets and operational spending caps.
— No new taxes.
— Operational health spending to rise 4.1 per cent.
— Kindergarten to Grade 12 operating expenses increases by 5.2 per cent.
— $178 million of revenue reductions over three years to make post-secondary education more affordable for students, including reduced loan rates, extended repayment grace period and tuition increases capped at two per cent starting in fall 2024.
— Operating and capital funding to municipalities to grow to $3.4 billion from $2.5 billion.
— $10 million over two years to promote rural tourism.
— An $800 million investment over three years from the TIER fund to programs to reduce greenhouse gas emissions and to support green technology.
— The capital plan has $23 billion over three years for a range of projects, including roads, bridges, recreational centres and schools.
With two kids under the age of six living in a two-bedroom, one-bathroom household, Jacquelin Forsey and her husband have long known it would only be a matter of time before their family outgrew their beloved home.
Long hours in the small space while Forsey was pregnant and toiling away from home during the COVID-19 pandemic, along with a visit to a neighbour who was selling their “beautiful” place that was “the perfect size,” convinced the couple to start their new home hunt recently.
“If there was any way to make this place bigger, we would never leave,” said Forsey, a PhD student, of the home her family owns in the Leslieville area of Toronto.
“We love it. We love the neighbourhood, we love our house, but we just can’t all be in this tiny house forever.”
The couple has spent recent months scouring listings and put in at least one failed bid, but Forsey has her fingers crossed that their fortunes will change this spring as economists and brokers predict activity to return to Canada’s housing market.
The market has been sluggish since last year, when prospective buyers started putting off plans to purchase homes as the Bank of Canada aggressively hiked interest rates eight consecutive times.
The quick succession of increases eroded buying power as borrowing costs rose and sent prices falling, discouraging sellers from listing their homes.
With Canadian Real Estate Association data showing average prices have dropped 19 per cent from their February peak of $816,578 to $662,437 last month and BMO Capital Markets’ chief economist predicting they will bottom out after falling 20 to 25 per cent, realtors see many edging toward a purchase once more.
“We got a flood of buyers in January, in February and we still are getting more and more and we started seeing multiple offers return and bully offers return,” said Michelle Gilbert, a Toronto broker with Sage Real Estate Ltd.
“We’ve started getting calls where buyers are just like ‘I think I’ll just adjust what I want, but I don’t want to miss my opportunity.”
These clients are a mix of people who have to move because they are relocating for work or growing their families and also first-time homebuyers keen to not let lower prices pass them by.
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Many first-time buyers are finding it harder to qualify for mortgages, but still want to make a purchase, so they are compensating by adjusting their expectations, said Gilbert.
“Maybe they can’t get the square footage they thought they could get because they can’t qualify for as much but they still really want to get a good deal,” she said.
Over in Vancouver, Coldwell Banker Prestige Realty agent Tirajeh Mazaheri has also seen a resurgence in buyers.
Weeks after the Bank of Canada signalled further interest rate hikes were unlikely, she said properties started selling quickly and with multiple offers.
She spotted a condo listed for $699,000 garner 11 offers and a house listed for $2.8 million snag five bids last month.
Others aren’t wading into the market just yet but are preparing to do so soon.
“Everyone who wasn’t pre-approved is getting themselves pre-approved because people want to jump on buying something because they’re worried that prices are going to start going way too high again,” said Mazaheri.
Despite such sentiment, she doesn’t see the market returning to the frenzied pace of 2021, largely because of the lack of properties available.
February’s new listings totalled 51,366, down 26 per cent from a year ago, the Canadian Real Estate Association recently revealed. On a seasonally-adjusted basis, they hit 57,535, down nearly eight per cent from January.
“A lot of sellers are beginning to want to list, but most of them, I am noticing, are a little bit cautious,” Mazaheri said.
“They’re noticing the shift in the market as well and they want to get top dollar for their property, so they’re thinking maybe let’s wait until the spring or the summer.”
For Forsey, there is no rush to buy a home, but she admits the pause on interest rates is giving her family some confidence in its decision to look for a new place.
While her engineer husband has been crafting spreadsheets calculating what they can afford, their amortization and the effects of potential interest rates, she said they’ve accepted “that we can’t time the market and we just have to do the best we can do and what we’re comfortable with and then hope it works out.”
“We can stay here until the right opportunity comes and we don’t have to rush out and we don’t have to make a rash decision,” she said.
“And if it doesn’t work out for a long time for us, that’s OK because what we’ve got is pretty great.”
© 2023 The Canadian Press
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The federal government is extending a program that temporarily resettles Ukrainians fleeing the war with Russia in Canada.
Ukrainians will now have until July 15, 2023, to apply to the Canada-Ukraine Authorization for Emergency Travel (CUAET) program. The program was set to expire on March 31.
It’s a special measure that allows Ukrainians, and their family members of any nationality, to settle in Canada for up to three years. CUAET allows successful applicants to apply for work and study permits free of charge.
Russia and Ukraine have been at war since 2014, but Russia stepped up its invasion significantly in February 2022. The federal government has provided military, financial and humanitarian aid to Ukraine and has slapped sanctions on thousands of Russians and Russian entities.
Immigration, Refugees and Citizenship Minister Sean Fraser made the announcement Wednesday.
“We’re going to closely monitor the ongoing needs of Ukrainians and Ukraine, to see how we can continue to lend our support and help win this war,” Fraser told a news conference.
The government has received just under a million applications to the program since it began in March 2022, and has approved 616,429 of them. Over 133,000 people have arrived in Canada through the program.
Fraser said the temporary nature of the program aligns with what Ukrainians want.
“When I speak to the vast majority of Ukrainians who’ve arrived here, their hope is that Ukraine is going to win this war. They want to go home one day,” Fraser said.
“To create a program that allows them to have temporary safe haven in Canada, while we await the circumstances on the ground becoming safe one day for people to return, has allowed us to help tens of thousands of people more than what otherwise would have been the case under a traditional refugee resettlement model.”
Fraser did not say whether the government would extend the program if the war continues beyond July 15. He said it will monitor the situation.
Ukrainians in Canada welcome extension
Kseniia Chystiakova, who is from a suburb of Kyiv, applied to CUAET just days after it launched in March 2022. She now lives in Winnipeg with her husband, son and mother.
Chystiakova’s father is in Germany because his application hasn’t been approved yet, and Immigration Refugees and Citizenship Canada (IRCC) hasn’t offered an explanation. Her mother, who did get approved, initially stayed with her husband but came to Canada last week as the March 31 deadline came closer.
But Chystiakova said she’s happy about the extension because it gives her father some time to get approved.
“I want them to be near us and to see their grandchild, but still we have hope that everything will be okay,” she said.
Chystiakova works at a staffing agency helping other Ukrainians find work. Her husband, who is not a Ukrainian citizen, is taking language classes and her son is enrolled in a local school.
“It’s a really great opportunity for him and for his future,” Chystiakova said.
“I think that we will stay here.”
Fraser made the announcement at Café Ukraine in Ottawa. The community cafe provides services, including language classes, to newcomer Ukrainians and host families.
“We’re only able to provide the support for Ukrainians because the government of Canada has generously opened the door for Ukrainians to come and find safe harbour here,” Yaroslav Baran, Café Ukraine’s co-founder, said at the announcement.
“The announcement that you’ve made today is a continuation of a long tradition, 130 years, of generous opening of doors by Canada to Ukrainians.”
The Ukrainian Canadian Congress (UCC) welcomed the government’s announcement.
“Our community is also grateful to the thousands of Canadians from coast to coast to coast who have opened their hearts and their homes to Ukrainians, the volunteers who work tirelessly to welcome Ukrainians in cities and towns across Canada, and the settlement services which deliver essential programs and supports,” Alexandra Chyczij, the UCC’s national president, said in a media statement.
“With increased support from allies like Canada, this year can be the year that the Russian armies are driven out of Ukraine and peace returns to Europe.”
Iain Reeve, associate director for immigration research at The Conference Board of Canada, said CUAET has brought new workers into Canada at a time when the country is facing a labour shortage.
“The Ukrainians come with a really wide variety of skills that can fit really well into a lot of available positions across Canada,” Reeve said.
“We see the enthusiasm that a lot of communities have had to welcome people, not just for the really obvious humanitarian benefits, but also because they see the potential labour market and economic benefits of welcoming Ukrainians — even if it is only on a temporary basis.”
But Reeve said the government will have to think carefully about the future of those coming in through the program.
“There’s a balance to be struck between not wanting to bring a bunch of people here under very difficult circumstances and maybe rob Ukraine of exactly the people that they’ll want to have back in the country to help rebuild once the conflict is hopefully over,” he said.
“But at the same time, if people want to stay in Canada, maybe we want to try to give them options to do that.”
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Han Dong, the Toronto-area MP at the centre of allegations that his election campaign benefited from Beijing’s meddling, says he is leaving the Liberal caucus and will sit as an Independent.
“I’m taking this extraordinary step because to [sit] in the government caucus is a privilege and my presence there may be seen by some as a conflict of duty and the wrong place to be as an independent investigation pursues the facts in this matter,” he said , reading a statement in the House of Commons on Wednesday night.
“I will be sitting as the Independent so that business of government and indeed the bills of Parliament is not interrupted as I work to clear my name and the truth is presented to Parliament and to Canadian people.”
His comments follow a story from Global News, alleging Dong advised a senior Chinese diplomat in February 2021 that Beijing should hold off on freeing Michael Kovrig and Michael Spavor — the two Canadians being held by China at the time.
The Global story cited two unnamed national security sources who said Dong made the suggestion because their release would be helpful to the Conservatives. CBC News has not verified the allegations.
Dong confirmed to Global that he had a discussion with Consul General Han Tao, but denied that he advised Beijing to delay releasing Kovrig and Spavor.
MP Han Dong discusses alleged election interference after a media report said he was one of the candidates believed to have been supported financially by the Chinese government heading into the 2019 election.
“Let me be clear. What has been reported is false, and I will defend myself against these absolutely untrue claims,” said the Don Valley North representative in his remarks to Parliament.
“But let me assure you as a parliamentarian and as a person, I have never and I will never, and would never advocate or support the violation of the basic human rights of any Canadian, of anyone, anywhere, period.”
A spokesperson for the Prime Minister’s Office said the office “only became aware that a conversation took place after Mr. Dong told us, following recent media questions.”
“I am a proud Liberal,” said Dong, his voice breaking during his remarks.
“Before concluding, I want to assure Mr. Michael Spavor and Mr. Michael Kovrig and their families that I did nothing to cause them any harm.”
“Mr. Speaker, I am in your hands as to what happens next.”
Dong spoke to reporters Tuesday
Alison Murphy, a spokesperson for Prime Minster Justin Trudeau, gave no other comment Wednesday night.
“I’ll refer you to Mr. Dong’s statement in the House tonight,” she wrote in an email.
An earlier Global News story, also citing anonymous sources, alleged national security officials gave an urgent briefing to senior aides from Trudeau’s office in 2019 “warning them that one of their candidates was part of a Chinese foreign interference network.”
Global’s sources allege the Canadian Security Intelligence Service (CSIS) believed Dong, who was re-elected in 2021, was a “witting affiliate” of China’s election interference networks.
Dong spoke to reporters for the first time Tuesday since that story broke in February.
“I was not offered, I was not told, I was not informed, nor would I accept any help from a foreign country, whether during my nomination or during my election campaign,” he said.
Dong also said Tuesday he had not been contacted by either CSIS, the RCMP or Elections Canada.
A CSIS spokesperson would not comment on whether the lack of contact with Dong was unusual.
“There are important limits to what I can publicly discuss, given the need to protect sensitive activities, techniques, methods and sources of intelligence,” Eric Balsam said in an email to CBC News on Wednesday.
“Disclosure could allow our adversaries to interrupt or harm our operations, techniques, methods and sources of intelligence. These limitations are therefore essential to ensure the safety, security and prosperity of Canada.”
Dong’s comments come as opposition MPs try to uncover what the Liberal Party knew, or didn’t know, about Beijing’s alleged attempts to meddle in Canada’s elections.
An independent panel tasked with overseeing the 2021 election concluded that foreign meddling did not affect the outcome.
CSIS calls foreign interference activities by China’s government the “greatest strategic threat to national security.”
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