Alberta's S&T initiatives take a modest hit as government seeking to reign in spending

Alberta's support for research and innovation will take a modest hit as a result of the government actions in the provincial Budget. The budget of the Ministry of Enterprise and Advanced Education (MEAE) will drop by 4.8% in FY13-14 to $2.594 billion as the province deals with a severe decline in resource revenue stemming from the low price Alberta bitumen is commanding on the global market.

The FY13-14 Budget deficit is estimated at $451 million but with cash adjustments, it could swell to nearly $2 billion, with the opposition Wildrose Party projecting that the shortfall could exceed $4 billion.

The Conservative government has responded by limiting the growth in operational spending, with increases in health and education pushing the total to $37.55 billion, up from $37 billion last year.

MEAE's budget classified as innovation and technology commercialization will drop 5% to $185.4 million with reductions in program delivery support (10%), research capacity (1.8%), strategic partnerships (12.8%), commercialization capacity (8.4%), transfer to the Alberta Enterprise Corp (48%%) and grants to the Alberta Innovates corporations from $137.2 million to $132.2 million (3.6%).

The dramatic reversal in Alberta's fiscal fortunes is largely due to the so-called Bitumen Bubble — the declining price of its heavy oil which generated $6.2 billion less in resource revenue than projected in the 2012 Budget.

Post-secondary education will receive approximately $2 billion this year, a decrease of $147 million. Budget documents note that operating grants to post-secondary institutions have increased by more than 45% over the past decade. Even with the FY13-14 reduction, it remains among the highest rate in Canada on a per capita basis

Alberta bitumen is classified as Western Canadian Select — a blend of 19 existing Canadian heavy conventional and bitumen crude oils blended with sweet synthetic and condensate diluents. It has recently been selling for a huge discount compared to other oil types — the result of pipeline access issues and growing US supply.

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