Alberta's NDP government hopes a spending stimulus will boost the economy and help the province climb out of a record $6.1-billion deficit.
At the same time, the government will hike the markup on alcohol, increase cigarette taxes, spend more on lower-income families and try to create thousands of new jobs.
Starting at midnight Oct. 28, the price of a carton of cigarettes will increase by $5 per carton; a 750-ml bottle of wine or hard liquor will cost 18 cents more and a case of 12 beers will go up an additional 21 cents.
There are also tax measures aimed to help lower-income families, including up to $2,750 for eligible families with incomes lower than $41,220. This program will cost the government $195 million.
Finance Minister Joe Ceci says billions in capital investment will stimulate the economy and could create as many as 37,000 jobs. The NDP will also reverse cuts to essential services proposed by the previous government.
The spending priorities are in keeping with the NDP's campaign promises and mark a decidedly different direction for the province in the wake of a four-decade Tory dynasty.
For example, the government is pushing the limits of what it plans to borrow. The contingency fund, the government's savings account, will be drawn down to zero in the 2016-17 fiscal year.
That's when the government will borrow to cover operating expenses for the first time since 1993. Borrowing for operational costs is forecast at $712 million that year, increasing to $3.3 billion the following year.
In his budget speech, Ceci said his government is reversing the Progressive Conservative's mismanagement over the past 30 years and spending $49.9 billion to do it.
Ceci praised the direction of the Alberta Progressive Conservatives under former Premier Peter Lougheed, but said successive governments "lost their way" guiding the province.
Brian Jean, leader of the Official Opposition Wildrose Party, called the budget a "complete fantasy" and said "every Albertan will be poorer because of this budget."
Jean accused the NDP of using "risky economic theories" and raising taxes that are affecting every person in the province.
The budget relied on advice of former Bank of Canada Governor David Dodge, who was hired to make recommendations on infrastructure spending. The NDP is spending $34 billion on capital projects over the next five years to spur the economy, a 15% increase or additional $4.5 billion from what the Tories promised in their last budget in March.
By speeding up construction on roads, schools and hospitals, up to 10,000 jobs will be created, Ceci said.
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