Alberta Premier Danielle Smith has announced a slew of measures to provide relief from high inflation, including cash payouts to seniors and families with children.
The move comes after Ms. Smith told her weekly radio show earlier this month that she preferred more targeted support over cash payments, which she warned could worsen inflation. The government under her predecessor, Jason Kenney, also shied away from direct support over the same concerns.
Ms. Smith also announced Tuesday that the province will once again suspend fuel taxes, extend electricity rebates through the winter, invest in food banks and expand public transit passes for low-income earners.
The province will also increase support for vulnerable people, including those eligible for benefits under Alberta’s Assured Income for the Severely Handicapped program, and its Persons with Developmental Disabilities program.
Ms. Smith did not put a price tag on the value of the relief package, but Rebecca Polak, a spokesperson for the Premier, said the measures are worth $2.4-billion. The announcement comes two days before Finance Minister Travis Toews will release the province’s second-quarter results.
In August, Alberta predicted a surplus of more than $13-billion in the current fiscal year – a sharp turnaround for a province that for years suffered through an economic downturn linked to low oil prices.
“The severity of this crisis has been primarily caused by years of record spending and debt by the federal government in Ottawa, combined with a continual string of anti-energy policies that are driving up the price of fuel, electricity, heating,” she said in her address.
While Alberta can’t solve the inflation crisis on its own, Ms. Smith said, the province is in a position to ease the pain as a result of a recent windfall from high energy prices. The plan’s details are still being finalized, she said.
Alberta’s next general election is scheduled for May. Polling suggests Ms. Smith and the UCP are struggling in the province’s urban communities.
The province plans to give seniors $600 each, over six months. Families with dependent children under 18 will receive the same amount per child, although Ms. Smith noted this will be targeted to families with household incomes below $180,000.
People collecting AISH and PDD will also receive $600, she said.
Saskatchewan, Manitoba and Quebec earlier this year introduced various plans to provide cash to residents, while Alberta shunned the strategy under Mr. Kenney.
The provincial government will also index AISH, PDD, the Alberta Seniors Benefit and the Alberta Child and Family Benefit starting in January, meaning payments from those programs will rise with inflation. The UCP, under Mr. Kenney, had de-indexed support programs such as AISH. He also de-indexed personal income tax brackets, only to reverse that before departing from the Premier’s Office.
Ms. Smith said on Tuesday that personal income tax brackets would be indexed retroactively to 2022.
The province will rebate consumer electricity bills at a rate of about $200 a household for the winter, extending a program Mr. Kenney introduced. Ms. Smith also pledged to “limit spikes in winter electricity rates while continuing with the current natural gas rebate program,” but did not provide further detail.
The government will also suspend the provincial fuel tax for “at least” the next six months, and make the “current fuel relief program” permanent, she said.
Mr. Kenney said in March that Alberta would temporarily suspend the 13-cent-per-litre tax on gasoline and diesel as of April 1. At the time, he was campaigning to keep his job, with a UCP leadership review scheduled for April 9.
Mr. Kenney’s fuel tax relief program was built on a sliding scale, with the tax to be eliminated when West Texas Intermediate oil traded above US$90 a barrel and fully restored if the benchmark price dropped below US$80. Mr. Kenney said the program was based on the price of oil in order to limit the damage to the provincial treasury. When energy prices are high, oil and gas companies pay richer royalties to the government, so Alberta could afford to provide consumers a cushion, he argued.
The government said it would review the tax’s status quarterly. In September, Alberta said fuel taxes would rise to 4.5 cents a litre the next month, because oil was trading between $80 and $90 per barrel. Taxes on marked gasoline and diesel remained at zero.
The government previously said it would review the fuel tax again in mid-December. WTI traded at an average of $87.55 in October and $84.26 in September.
Rachel Notley, the leader of the New Democratic Party in Alberta, focused her response to the Premier’s announcement on the coming election. Ms. Notley noted Ms. Smith’s measures involve reversing a number of policies that were implemented by the UCP.
The NDP, like Ms. Smith, would reverse the UCP’s earlier cuts to AISH and other support programs, Ms. Notley said.
“And we’ll go further,” she said. “We’ll take action on the things you don’t have a choice about paying for, like groceries, utilities, insurance, gasoline, tuition and housing.”
She also pledged to “restart the largest affordable housing build this province has ever seen,” but did not provide further detail.