Building Alberta: Responsible capital plan meets needs of rapidly growing population
“The new capital plan continues to build Alberta in a way that will meet the needs of the province for generations,” said Doug Horner, President of Treasury Board and Minister of Finance. “With Alberta’s population growing by 95,000 people last year alone, and the province poised to grow to more than five million people within the next 20 years - we need to be ready for the future.”
The 2013-16 Capital Plan supports $15 billion in infrastructure projects, with $5.2 billion in each of the next two years and $4.7 billion in 2015-16.  Alberta has invested more than $72 billion in infrastructure over the last fifteen years.
“Infrastructure spending is lower than in recent years but we are still maintaining a significant and responsible level of investment,” said Wayne Drysdale, Minister of Infrastructure. “Albertans have been clear they want our government to continue capital investment now to get ahead of the growth curve instead of trying to catch up when labour and construction material costs are higher.”
Major new additions to the plan include:
- $503 million over the next three years for 50 new schools and 70 modernizations, with an expected total cost of more than $2 billion;
- $282 million over the next three years for new post-secondary facilities at the Northern Alberta Institute of Technology, NorQuest College, University of Calgary, Lethbridge College and Mount Royal University, with an expected total cost of more than $650 million; and
- $442 million to twin sections of Highway 63 from south of House River to south of Fort McMurray over the next three years.
Other major features of the plan include $2.5 billion over three years for the Municipal Sustainability Initiative and $2.1 billion for health care facilities, including hospitals, family care clinics, cancer centres, supportive living and long term care.
A complete list of approved Alberta government infrastructure projects can be viewed online at www.infrastructure.alberta.ca.
The plan also includes significant investment in maintaining and extending the life of existing assets. More than $1.2 billion will be used over three years to maintain and renew aging schools and post-secondary facilities, roads, health facilities, water infrastructure and provincial parks.
Capital Plan Financing and Borrowing
In 2013-14, $4.3 billion (includes $1.1 billion borrowed in 2012-13) of the capital plan will be funded through direct borrowing, in addition to continued use of public-private partnerships.
The borrowing strategy will leverage Alberta’s triple-A credit rating and low interest rates to minimize costs. A second advantage of this approach is that it spreads out the cost of infrastructure with the life of the asset, sharing those costs over time with those who enjoy its use.
The government will set aside money each year in a capital debt repayment account to ensure that there is money available to repay the debt as it comes due.
The government has also included a limit on borrowing for the capital plan. By law, debt servicing costs cannot exceed three per cent of the average of operational revenue over the current year and two prior years. Borrowing for operating purposes continues to be prohibited.
A copy of the 2013-16 Capital Plan is available at budget2013.alberta.ca.
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