EDMONTON - Alberta will spend a record $33 billion this year to try to catch up once and for all to a hot-rocket economy that has left behind a cold vapour trail of crumbling infrastructure and social problems.
The 2007-08 budget, the first under new Progressive Conservative Premier Ed Stelmach, takes aim at some of the biggest cracks in Alberta's energy-fuelled boom -- a desperate lack of affordable housing, overcrowded and dilapidated schools, struggling hospitals and roads inadequate to the point of being hazardous.
"This is the price of prosperity," Finance Minister Lyle Oberg said Thursday before introducing the budget in the legislature.
"There comes a point in time when we have to catch up on the building.''
Critics dismissed it as more high-gloss lipstick on a pig of a problem created by a Tory government that has proven over a decade it can't plan its way out of a paper bag.
"We're having to pay the bill for many, many years of Tory mismanagement,'' said Opposition Liberal Leader Kevin Taft.
"Unfortunately we can't pay that bill in one year it's so big, but we need to shake out of this approach of just patching holes.''
Oberg said only 20-20 hindsight would have predicted the explosion in Alberta's population and economy.
"I would hesitate to ask anyone in the province of Alberta, in the country of Canada, to predict we would have had a 6.9 per cent GDP growth last year.
"I would challenge anyone to say that we would have had 100,000 new people move into Alberta last year."
NDP Leader Brian Mason said a rush to build and renovate in an overheated economy will further punish low and middle-income earners struggling with rising inflation.
"It's going to mean middle-class families, working families struggling to make ends meet, are going to have a real hard time paying rent, paying property taxes, paying for the utilities."
The spending increases focus on catching up to the infrastructure backlog that built up under former premier Ralph Klein, who channelled previous multibillion-dollar surpluses into paying off the province's debt.
As he left office last year, Klein admitted his government never crafted a plan to deal with the phenomenal growth. On Tuesday, a government insider echoed that: "We're cleaning up Ralph's mess."
The budget, Alberta's 14th consecutive balanced spending plan, projects a surplus of $2.2 billion on revenues of $35.3 billion and includes $18.2 billion over a three-year period to pay for badly needed building projects.
That money is a 37 per cent increase over last year's capital plan.
Municipalities will receive $4.3 billion over three years to fix roads and bridges, build affordable housing and upgrade public transportation.
There will be $1.3 billion for school building projects and $3 billion for health facilities, including a new hospital in Grande Prairie.
Post-secondary students will catch a break as the province spends $22 million to limit tuition increases to the cost of inflation and the post-secondary tax credit rises to $600 from $475.
The charitable donations tax credit will almost double to 21 per cent.
Smokers will now have to dig deeper. Tobacco taxes are rising 16 per cent -- $5 on a carton.
The province will retain its controversial Alberta Health Care premium because, said Oberg, when it comes down to a choice between fee cuts or construction, Albertans are telling him to build.
In the Health Department, program spending will rise 12 per cent to $12 billion -- about a third of the total budget pie.
The budget alone won't cure many of the ills linked to the boom, however.
Vacancy rates are near zero in big cities. Rents are getting jacked up. Low-income earners are being forced out as apartment owners race to convert the suites to condos. Home prices are soaring.
There's a shortage of doctors and nurses. Even a 40 per cent rise in syphilis infections is being blamed on the economic good times.
Shops close early for lack of staff. Construction workers are scarce and building costs are spiking.
Commuting has become a nightmare in Calgary, where downtown parking prices are among the highest in Canada.
Scott Hennig, Alberta director of the Canadian Taxpayers Federation, labelled the spending "irresponsible.''
"I hope somewhere in that $33 billion they are hiring some clergy to pray for high oil and gas prices, because that's what they're going to need to maintain this budget,'' he said.
The budget is based on oil at US$58 per barrel and natural gas at C$6.75 per gigajoule.
Oberg, once a vocal campaigner for fiscal restraint, stressed the mammoth spending is a short-term solution.
"Are we going to continue to plan for record amounts? I would love to, guys, but realistically, as finance minister, we can't. We have to ensure we're sustainable.''
