If there’s one thing that all of Alberta’s recent governments of varying stripes have in common it’s their reluctance to make the tough decisions to address Alberta’s fiscal challenges. Former Premier Jim Prentice once suggested that we all needed to look in the mirror. It was an unpopular thing to say at the time, but he was right. The longer we wait to honestly reckon with our fiscal challenges, the worse it’s going to be.
Why is this so challenging for Alberta? In part, it’s because our political system prioritizes the interests of today’s voters at the cost of the interests of future ones. In part, it’s because our elected officials have not dared try to challenge prevailing narratives and myths that have become almost cultural folklore. But probably more than anything, it’s because for decades, we’ve had the luxury of using the flood of natural resource royalties to balance our books, despite having lower taxes and higher per-capita spending than any other province in Canada.
With the fall in oil and gas prices since late 2014, that crutch has largely been removed. And while it might be tempting to wait for it to return (particularly in the face of a likely rise in prices as the global economy emerges from the pandemic), praying for a lottery win isn’t the right way to run a household’s budget, much less a province’s. Having our public finances and therefore our social service delivery capacity so exposed to the volatility of global commodity prices over which we have no control is a recipe for disaster. Alberta must address this issue.
Getting our fiscal house in order isn’t nearly as difficult as it might seem. If Alberta had the same per-capita spending and tax policies as Saskatchewan, we’d be able to balance our budget with ease — and even save a bit for the future. Saskatchewan made hard decisions a few years back, from raising the province’s PST to cutting spending, that Alberta has been unwilling to consider. We need to talk about those harder decisions, and push our politicians to make them. If we don’t, it will be our kids and grandkids paying the price.
The Possibility: We can create a more predictable and sustainable fiscal framework for our province — one that maintains a competitive tax rate and effective public services, without placing the burden on future generations.