Thursday, November 24, 2022

No kids? No cash: Many working Albertans won't receive government's inflation-busting benefits

Story by Michelle Bellefontaine • Yesterday 

Alberta's affordability minister is defending a new program that provides cash for families, seniors and people who receive social benefits but cuts out single working people with low incomes.


Alberta Premier Danielle Smith promised measures to help Albertans deal with the high cost of living during a televised address Tuesday.© Jason Franson/The Canadian Press

On Tuesday, Premier Danielle Smith announced in a televised address that families earning up to $180,000 a year will be given $600 for each dependent child aged six months and older. The benefit will also be extended to seniors and recipients of income support, assured income for the severely handicapped (AISH), and persons with developmental disabilities (PDD) funding.

An adult working 40 hours a week at Alberta's $15-per-hour minimum wage rate takes home about $31,200 a year. However, that person would not qualify for the $600 government payment unless they are a senior or have a child.

"We must target additional supports to where they're needed most," Matt Jones, Alberta's minister for affordability and utilities, said Wednesday.

"Seniors and disabled Albertans and families with a large number of dependents would seem to be worthy recipients of additional targeted supports," he said.

Jones said the $180,000 figure is based on the threshold used for child care supports. He said childless Albertans should see benefits from other affordability measures, such as suspension of the provincial fuel tax and electricity rebates over the winter.

The affordability measures are expected to start in January, with more details coming early next month. Those details will be contained within enabling legislation the government hopes to pass during the four-week fall sitting that starts on Tuesday.

Jones made the comments at a news conference announcing $10 million in funding over two years for Alberta Food Banks. The province will also provide another $10 million in matching funds over the same period toward food banks, charities, not-for-profits and civil society organizations.

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Arianna Scott, president of Alberta Food Banks, said that aside from $6 million in COVID-19 support, this funding is the first food banks have received from the provincial government.

"This is a first," she said. "So this is pretty significant for us."

'Frantic plan'


Smith is facing criticism that the new affordability measures are an effort to buy votes leading up to the next provincial election in May 2023.

Alberta NDP Leader Rachel Notley called the plan "a pre-election gift card" that was pulled together without much thought.

She said cash benefit plan excludes many Albertans who need help, such as single working adults without children or childless couples who are cobbling together a family income by working multiple minimum wage jobs.

Notley said the measure looks like "a back-of-the-napkin kind of frantic plan that was thrown together by a premier … who's just really not very good at at governing."

In 2019, former premier Jason Kenney and his government removed cost-of-living increases from AISH, income support and other social benefits as a cost-cutting measure.

Since then, high inflation has drastically eroded what people can afford, driving many to seek help from food banks.

While Smith is pledging to bring back indexing starting in January, Notley said the measure still leaves benefit recipients $3,000 short of where they would have been if the government had left payments alone three years ago.

In Smith's nine-minute address on Tuesday evening, she discussed rebates to help people facing high electricity bills and measures to prevent rate spikes over the winter months.


She wants to remove the provincial fuel tax for at least six months to help lower the price of gas. She re-announced former premier Jason Kenney's plan to start indexing tax brackets to the rate of inflation starting with the 2022 tax season.

In addition to helping food banks, Smith said she wants to fund more low-income transit passes.

Cost of affordability measures pegged at $2.8B in Alberta fiscal update

Story by Michelle Bellefontaine • 

Alberta's second-quarter fiscal update puts the costs of the province's new affordability measures at $2.8 billion over three years.
ASSUMING THEY WIN ELECTION NEXT SPRING

Alberta Finance Minister Travis Toews released results of the second quarter of the 2022-23 fiscal year Thursday.© Juris Graney/CBC

The update, released Thursday by Finance Minister Travis Toews, reveals the government will spend $1.3 billion on the affordability package in this fiscal year, $1.2 billion in 2023-24 and $300 million in 2024-25.

Premier Danielle Smith announced the measures in a televised address Tuesday night.

They include cash payments for seniors, families with children and people who receive AISH, PDD and income support; a suspension of the provincial gas tax, and help with electricity bills over the winter.

Officials with the premier's office on Tuesday put the cost of the package at $2.4 billion.

The money is coming mostly from the budget surplus for 2022-23, which is now forecast at $12.3 billion, $900 million less than the $13.2 billion forecast at the end of the first quarter. The government said the drop is due to softening oil prices and demand.

West Texas Intermediate oil is now forecast to average $91.50 US per barrel in 2022-23.

The surplus estimate for 2023-24 is $5.6 billion. In 2024-25, the surplus estimate is $5.3 billion.

The monthly $100 payments to seniors, families with children and others outlined in the affordability measures are set to start in January and continue three months into the next fiscal year.

The costs that carry over into the 2024-25 fiscal year account for the effects of reindexing social benefits and tax brackets to the cost of inflation. They were deindexed in 2019 as a cost-savings measure.

The mid-year update shows the province is forgoing nearly $1 billion in revenues in this fiscal year through the suspension of the 13 cent per litre provincial fuel tax which started April 1. Collection of part of the tax — 4.5 cents per litre — resumed on Oct. 1.

In her address on Tuesday, Smith said the government will suspend the provincial fuel tax entirely for at least six months as part of the affordability measures.

On Wednesday, a spokesperson for the premier said the affordability program will roll out beginning in January, after the government passes enabling legislation in December.

In presenting the first-quarter update at the end of August, then-finance minister Jason Nixon said the province was saving $1.7 billion of the surplus in the Heritage Fund. However, that figure doesn't appear in Thursday's update.

The government said Thursday that moving money into the Heritage Fund is still on the table but cabinet will soon make decisions on how to use its surplus.

"The merits of reducing debt and debt-servicing costs relative to increasing savings and investment income will be contemplated," the second-quarter report says. "The government will thoughtfully analyze these various uses of surplus cash and make decisions that meet Albertans' priorities."

Spending up

The second-quarter update covers the period from July 1 to Sept. 30 and reflects where the province's finances sit in the middle of the fiscal year. The figures in the quarterly updates are forecasts of how the year will end on March 30, 2023.

Alberta's finances have been buoyed by a surge in world oil prices partly caused by renewed interest in travel, which pushed up demand, and the Russian invasion of Ukraine.

The province is forecasting $79.1 billion in revenue and $64.6 million in expenses.

Spending is up $2.5 billion from the February budget.

Extra expenses include $64 million for school bus fuel and negotiated increases to teacher salaries; $340 million for the new agreement with physicians and the resolution of contracts with other health-care workers; and $50 million for victim services, legal aid and compensation for judges.

Revenue from non-renewable resources is forecast at $28.1 billion.

Corporate income tax is projected at $6.3 billion, which the government says is the largest amount it will ever collect. Revenue from personal income tax is expected to be $13.3 billion, $83 million lower than forecast in the February budget.

The province still plans to put $13.4 billion toward debt repayment. The debt is forecast to be $79.8 billion at the end of the current fiscal year.

The budget presented in February predicted a surplus of just $511 million, but that projection soared to $13.2 billion in the first-quarter update on the strength of oil prices in the US$100-a-barrel range.

Alta.'s tactic of doling out cash fuels inflation rather than easing it: economists


Provinces peppering the public with cash to deal with soaring prices compounds inflation rather than easing it, economists say.




They say the tactic used by Alberta this week and B.C. and Quebec earlier this year fails to quell inflation because having extra money means people will continue spending and demand for products and service will stay high, keeping decades-high inflation from budging.

If people had less money to spend while prices were high it would weigh on inflation, they say.

Inflation sat at 6.9 per cent last month down from 8.1 per cent in June.

Giving money to households is "likely to contribute to the problem as opposed to solving it," said Travis Shaw, senior vice-president of public finance at DBRS Morningstar.

"It does contradict what the Bank of Canada is trying to do with monetary policy in terms of trying to take some heat out of the system and ultimately bring down inflation," he said.

His remarks come a day after Alberta Premier Danielle Smith announced her Inflation Relief Act, which will dole out $600 over six months to families earning less than $180,000 for each child under the age of 18 or senior.

Smith will also index income supports to inflation, provide an additional $200 in consumer electricity bill rebates through the winter months and suspend the entire provincial fuel tax for at least the next six months.

Rounding out the $2.4 billion plan are an investment in food banks and an expansion of a public transit pass program for low-income earners.

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"Too many moms and dads are having to choose between nutritious food for their children and making their rising mortgage payments. Many seniors are choosing between filling their needed prescriptions and fuel for their vehicles," Smith said during a Tuesday speech announcing the measures.

"As a province we can’t solve this inflation crisis on our own, but due to our strong fiscal position and balanced budget, we can offer substantial relief, so Albertans and their families are better able to manage through this storm."

Shaw noted Smith's announcement comes ahead of Alberta Finance Minister Travis Toews making a mid-year fiscal update and economic statement on Thursday and six months before the province will plunge into an election.

"These payments are going to be $100 payments for six months, which lines up pretty nicely with when the spring election will be taking place," Shaw said.

Smith is not the only premier to turn to payouts for inflation relief.

In September, B.C. Premier John Horgan announced roughly 85 per cent of people in the province would benefit from the government increasing the Climate Action Tax Credit payment, estimated to be worth up to $1,500 a year for a family of four.

At the same time, he said the B.C. Family Benefit, formerly known as the province’s Child Opportunity Fund, would provide increased tax-free monthly payments to about 75 per cent of B.C. families with children under 18.

The family benefit is meant to be a temporary measure spanning January to March, with the increase amounting to $58 a month for a single parent with one child.

Before Horgan, Quebec Finance Minister Eric Girard used his spring budget to offer a one-time payment of $500 to every adult earning $100,000 or less.

Shaw thinks other provinces might get inspired by such moves.

He said, "I would expect that, should inflation remain persistently high, we could see additional measures at the provincial level or an extension of existing measures."

—With files from Dirk Meissner in B.C.

This report by The Canadian Press was first published Nov. 23, 2022.

Tara Deschamps, The Canadian Press

Alberta government earmarks $20M to help food banks, agencies during inflation crisis

CALGARY — An Alberta cabinet minister says it makes more sense now to help people in the province suffering from an "inflation crisis" and skyrocketing utility bills than waiting for another seven months.


Matt Jones, minister of affordability and utilities, said he's not about to apologize for providing help at this point, even though there's a provincial election expected in the province in May.

"I would say there either is a cost of living and inflation crisis or there isn't. Albertans are certainly feeling it and the next question becomes, should the government respond to address the real needs of Albertans now or wait for seven months?" Jones said Wednesday in Calgary during an announcement that the province is to provide $20 million over the next two years to help food banks.

"I'm not prepared to tell families to wait to feed their families or to get to work. We've been financially disciplined for three years, so we are in a position to do so and I think it's important that we support Albertans in their time of greatest need."

Alberta is on track for a $13-billion surplus this year due to rebounding oil and gas prices, with an update on the budget coming Thursday.

The money is to include $10 million in direct funds and an additional $10 million in matching funds toward food banks, charities, non-profits and civil society organizations.

Jeremy Nixon, minister of seniors, community and social services, said there is an "immediate crisis, so I think that adds to the answer why now."

“Many Albertans rely on food banks, which is why I am so grateful for the work they do in their local communities. It is my goal to ensure that no Albertan ever needs to wonder where their next meal will come from," Nixon said.

"During the pandemic there was also a crisis, so this isn't new. We recently put $6 million into food banks then and we're building on that."

Related video: Non-profits in Alberta calling for cash injection from the provincial government
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Food Banks Alberta CEO Arianna Scott said the money is critical to meet rising needs from the public.

"When (the) Hunger Count (report) came out nationally in October, Alberta experienced a 73 per cent increase since 2019. So it is the largest increase across the country. It is also the largest increase that Alberta has ever experienced," Scott said.

"We hear from our members every day that the number of new clients coming through the door is increasing exponentially. The majority of our members continue to experience an increase month over month throughout this year."

Premier Danielle Smith announced Tuesday payouts of $600 for middle- to lower-income families in a provincewide TV address. Those with a household income of less than $180,000 a year are to get $600 for each child under 18 over a period of six months. The same income threshold and benefit applies to seniors.

The government is also promising to remove its provincial gasoline tax and to continue providing electricity rebates.

Jones said Wednesday that those not eligible for the $600 payouts aren't being left out.

"The vast majority of Albertans will be eligible for up to $500 in electricity rebates and even more when you combine the fuel tax relief," he said.

"I think we would all agree as the cost of living and inflation crises persist, we must target additional supports to where it is needed most."

In Calgary, Opposition NDP Leader Rachel Notley said she welcomes more money for food banks but hopes it doesn't come at the expense of help for other aid agencies.

Notley said food banks must remain a last resort and the United Conservative government has accelerated the need for them by cutting supports like rent subsidies. The government also de-indexed benefits for seniors and the vulnerable in 2019 and recently committed to re-indexing them.

"In the long-term, we still need to design our programs to eliminate the need for food banks," said Notley. "That must be a priority for the provincial government."

This report by The Canadian Press was first published Nov. 23, 2022.

Bill Graveland, The Canadian Press

Danielle Smith Says Financial Relief Is Coming For Albertans & Some Could Get $600 Soon

Story by Charlie Hart • 

Alberta Premier Danielle Smith has announced that new measures are coming in the province to help people deal with the cost of living.


Danielle Smith Says Financial Relief Is Coming For Albertans & Some Could Get $600 Soon© Provided by Narcity Québec

In an address to the province on Tuesday, November 22, Smith said one of the main challenges Albertans are facing right now is the "inflation and affordability crisis."

Smith said while Alberta can't solve the inflation crisis on its own, the province is able to "offer substantial relief" for Albertans to help families with rising costs.

While details of the Inflation Relief Act are being finalized, Smith did reveal some of the measures which are set to be put in place in the province.

Families with children under the age of 18 are set to benefit as the Alberta Government could be giving them $600 per child over the course of six months. Seniors in Alberta would also benefit from this act, as they are expected to receive the same amount. It would apply to families with household incomes of less than $180,000.

Those who receive income support such as AISH and PDD would also receive $600, under the new measures.

For the rest of Alberta, there might still be some hope when tax season comes around.

Smith announced that provincial tax brackets would be indexed for 2022, which will mean bigger rebates when taxes are filed in the spring.

Rebates on electricity bills through the winter will also be increased so Albertans will be getting an additional $200 per household.

Other measures included another suspension of the entire provincial fuel tax for the next six months and an increased rebate on consumer electricity bills.

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