Transcript of Q&A with Alberta Finance Minister in Lethbridge

Q (no name provided): Thank you very much for your presentation Mr. Toews. I have a question. I’d like to thank you in the budget and in your presentation today for outlining our needs for funding to mental health services in Lethbridge. It’ll certainly make a meaningful impact in our community. My question is whether you have any inkling as to when that funding will be laid out and dispersed?

A: You know, that’s a great question and I appreciate the need and the urgency here. It’s important that we get this budget rolled out, so the Minister of Health and the Associate Minister of Mental Health and Addictions could begin their program delivery in that area. I cannot make a clear statement on when that’ll be rolled out, but I recognize the urgency and the great need in that area.

Q (Bridget Mearns – BILD Lethbridge): Thank you very much for your investment in the trades. It might be something that’ll be paying dividends in the future. I had one question around, not specifically that’s going to be in the budget, but it’s under your portfolio regarding the mortgage stress test. This is an issue that’s hit our city hard and our building industry up to 40% in some cases. I didn’t see it addressed specifically, but I’m wondering if you could give us some insight on that. A resolution went to AUMA (Alberta Urban Municipalities Association), as you know, to look into an Alberta solution for this as it was approved by 83%.

A: Great question. We share your position – we believe that it’s not applied appropriately here in Alberta. We believe that that measure was made for overheated housing economies in Toronto and Vancouver. I’ve communicated clearly with Federal Minister [Bill] Morneau on this issue. I haven’t done it again since the election, but we will be moving into a time of engagement with the federal and provincial ministers. That is one of the key agenda items on my agenda. I’m hoping to work with other provinces to elevate that one to the national stage. Again, I’ve made my point clear that we don’t believe it should apply in Alberta. Now, we’re going to ratchet up our engagement now post-election.

Q (Bridget Mearns – BILD Lethbridge): Thank you. I appreciate that federal angle and I realize that you don’t have much to do other than be able to advocate on our behalf, but the institutions that aren’t federally-regulated such as ATB or credit unions – is there any movement there?

A: We’ve had conversations, I’ve had conversations with both groups. They are not bound legally by that legislation by that requirement. They are lending right now, at times, outside of the B20 rules. Their advice to me, their response to me is that they’re taking a look at every individual investment loan opportunity that they might have and they’re measuring risk with return. They’re not bound by the stress test rules – they’re implicated to some degree because of mortgage insurance challenges, challenges around derivatives, re-selling those mortgages out into the investment community and those are impacted by the B20 rules. But in terms of actually evaluating mortgages, they don’t, they’re not bound legally, and so they’re evaluating each on a case-by-case basis. We really need to make some milage on this federally.

Q (Peter Casurella – South Grow Regional Initiative): We’ve had a lot of questions about the economic development strategy that’s reflected in this budget. It’s no secret that we don’t have oil, it’s not a major player in our economy and for the past 15 years, we’ve really had to go things alone with the essential support, some ground-level business retention and support programs from the government that’ve been very successful. We grow global businesses here in southern Alberta. With the support of the, kind of, ecosystem we’ve built up in order to do that. We can’t get clarity from the ministry on what these strategies are going to look like going forward, if we’ll continue to be a partner with the provincial government or if we’ll be entirely on our own. We haven’t benefitted much from Best Alberta in the past and we’re wondering what that looks like going forward.

A: Sure, a couple of things. Firstly, I would be very interested if you had suggestions or proposals – obviously, very interested in looking at those for future budgets we’ll be rolling out. Secondly, we’re taking a broad-based approach to incentivizing our economy here in the province. We believe that the role of government is to broadly improve the competitiveness of the province, so again, we’re ensuring that we have the most competitive broad-based corporate tax rate in this country. We’re ensuring, by the way, also left the small business corporate tax rate at two percent. The previous government dropped that rate from three percent to two to offset the carbon tax for small businesses. Even though we’ve repealed the carbon tax, we’re leaving that small business rate at two percent because we know that’s important for small businesses. The adoption of the accelerated capital cost allowance provision, again, we believe broadly will provide incentives to businesses to invest, and our approach with regulatory reform will be absolutely essential to ensure we’re competitive. Here’s our concern – I believe if government begins to pick winners and losers, both in terms of sectors or individuals with the tax credit approach, we won’t get it right. In our view, to create the most competitive, broad-based business environment, and let private individuals who know far better than government where the opportunities lie and where they don’t, I believe that will result in a much more appropriate and sustained allocation of capital in this province. Diversification is only excellent if it’s sustainable diversification and I believe that’s the way to land that. This region is a success story in diversification – you have world-class agri-food processing industry sectors here, you have a world-class agricultural sector here. Believe me, I was the president of the Canadian Cattleman’s Association for a couple of years post-BSE and I worked with many of the folks in this region. You absolutely have a world-class agricultural sector here and the processing sector to back it up. We want to broadly ensure we have the most competitive business environment for that sector to thrive. If there are additional things, we would be interested in hearing them, but our approach is broad-based.

Q (Peter Casurella – South Grow Regional Initiative): The last thing I’ll say is the municipalities are making decisions around budgets soon and anything that our colleagues can do to get the information on specific programs we should be applying for to shoulder additional costs as they come down. The quicker the better.

A: We’ll pass that on to Municipal Affairs.

Q (Ron Lagemaat – Lethbridge and District Association of Realtors): Thank you for your presentation. You mentioned that municipalities in Alberta are paid more grants and higher amounts from this province than is seen in the other provinces. One aspect of that is, what is the property taxes that the municipalities then have the charge their citizens? How do we compare a municipality in Alberta to municipalities in Ontario or B.C. as you’ve shown because your data doesn’t point that out? If the grants are going to be reduced going to the municipalities, then the burden of those essential services goes onto the municipality, and necessarily, the taxpayers have to pay more for the municipality. So we may have saved some tax dollars for the province, but overall, the same one taxpayer still pays more money. So what is planned as grants are being reduced that operationally our municipalities are still able to function with essential services they have for their residents without having to overburden with extra taxes?

A: Great question. The vast majority of our restrain with municipalities is capital in nature, so we’re reducing the Municipal Sustainability Initiative grant funding by nine percent and the program that will follow that, which, with the Cities of Edmonton and Calgary was the City Charters arrangement, which we are now moving out to all municipalities, will be a nine percent reduction of what they had agreed to with the previous government, so it’s nine percent capital related. Here’s finding of the MacKinnon panel is that municipalities actually spent 81% more on capital over a number of years than the comparative provinces, so my expectation isn’t that municipalities are going to jack up tax rates, they’re going to actually join us in our effort on prioritizing projects of greatest concern and being as wise and effective with the capital dollars that they have. The fact is, MacKinnon was clear – we’re all living beyond our means, not only the province, even more so municipalities. Their recommendation was we all exercise spending restraint, better prioritization on those projects that really move the meter that are essentially-necessary, and live within our means.

Q (Cheryl Gilmore, Lethbridge School Division): I have a question that, I think, affects everyone in this room because I see many parents, grandparents, and aunts, uncles, and so forth. Perhaps I have misplaced [the review] of what it’ll look like in terms of capital announcements to date in a city that has ongoing growth, schools at core capacity of 120-160% on the west side of Lethbridge, and certainly, projected growth that will restrict our school in the very near future, and when I thought about where would we sit relative to the province in capital announcements, I felt somewhat confident that if decisions were made based on growth and capacity and projected growth, the City of Lethbridge, Lethbridge School Division, and Holy Spirit, would see a school. The list doesn’t have school south of Calgary. I was wondering if the decisions were based on growth, capacity, or if there are other factors involved?

A: Cheryl, that’s a great question and I wish I had the Education Minister with me today to provide a more substantive answer. Thanks for coming out today. I guess, on a broad basis, we will continue to build schools and our goal, our motive, our criterion in terms of where they get built is based on enrollment growth. That really is the criterion. So what I commit to do is, I commit to take your comments back. We will be rolling out another budget in February, and with that, making adjustments to the capital plan as required. Our commitment is to continue to build schools where enrollment growth requires the need. I make that commitment to you and we will take your comments back.

Q (Victoria Chester – Highway 3 Twinning Development Association): I just wanted to comment, as you prioritize your capital spending, you consider the economic development that is going on in this community and our ability to get products to market isn’t just a pipeline up north. Southern Alberta can sometimes feel like they’re left out in some ways where, in comparison, Alberta might feel they’re left out with the [federal] Liberal government. I would just like to ask you to consider a dedicated program for Highway 3 twinning that will help with the Cavendish potatoes, it will help with the mining that’s going on and the new companies opening in the Crowsnest Pass, fertilizer plants in the Medicine Hat area, that we get some funding, even if it’s small, that we make the next steps and go on to engineering and design.

A: I appreciate you raising that. I have heard about the Highway 3 twinning rationale that there’s great need for that. The Minister of Transportation sits on treasury board with Minister Hunter and I. Ultimately, that ministry identifies the priorities on their lists. I know that HIghway 3 is a priority based on the conversations I’ve had with folks from the communities. I will say this, that our direction and instruction is that we place a high priority on those capital infrastructure projects that will improve our competitiveness, that will attract investment, that will result in more opportunities. That much I can commit to you today – this capital plan is ongoing and, again, I appreciate and hearing the importance of Highway 3 twinning.

Q (Attila Braun – Prairie Sky RV): I’d like to represent all of the campers and off-road people in southern Alberta that enjoy off-roading. My question is, are there any plans to re-open the many campgrounds in the backwoods areas that have been closed to off-roading and camping in Alberta?

A: I can’t answer that well. That will be a question for the Environment Minister, Minister Nixon. Again, I can take that question forward. I absolutely recognize the value in, firstly, as Albertans, being able to get out and enjoy the incredible scenery and environment that we have, but also important to economic development. I’ll commit to taking that question forward and we can provide a response.

by David Opinko

Transcript of Q&A with Alberta Finance Minister in Lethbridge

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