Alberta’s government has released the province’s fiscal update.
It’s gut-check time.
Five years of economic stagnation followed by an unprecedented public health crisis has sent our province’s treasury in the wrong direction. Instead of a $6 billion deficit forecast in Budget 2020 we’re looking at an historic $24.2 billion deficit- $16.8 billion higher than estimated earlier this year.
The global pandemic, worldwide economic recession, and massive plunge in energy prices put a severe dent in our province’s finances. Alberta’s government acted swiftly to ensure that all Albertans had what they needed and continues to provide funds so Albertans can safely resume familiar activities. All told, the province has spent some $14 billion on mitigating the health and economic effects of the pandemic.
This spending is but a short-term solution meant to meet the immediate needs of our province. It is time to look at ways to scale back this spending so as not to saddle tax payers with insurmountable debt. At some point, debt will have to be repaid and our province needs to position itself so that debt repayment does not equate to being unable to provide the services and programs Albertans need. This is where we need to take a long, hard look at needs versus wants.
Alberta needs to abandon the premise of taxing and spending our way out of economic woes. This has proven time and again to only stifle economic growth and kick the issue of public debt down the road. We need to consider what has worked well in the past. In the 1990s, Alberta’s government decreased the tax burden on individuals and business, reduced fees, regulatory constraints, and unnecessary red tape.
The resulting effect was a flood of investment into the province creating jobs, fostering economic diversity, and providing upward economic mobility opportunities for everyone; regardless of experience or education. Alberta paid down its debt and was able to channel tax dollars directly to programs and services for Albertans.
While today’s circumstances are vastly different than the Klein years, the same underlying issues and the principles behind their solutions apply. We need to get back to balanced budgets and back to being responsible stewards of tax payer dollars. The key to this is to attract investment back to Alberta and for government to get out of the way and let the market drive our recovery.
Alberta’s Recovery Plan includes and builds on the successes of past policies. The Alberta Investment Corporation will promote our province as the best place to do business, work, play, and live. Alberta’s record for environmental stewardship and sustainable development practices is unmatched; and one we are committed to building upon. We have a young, driven, highly skilled, and highly educated workforce. Alberta abounds in ambitious entrepreneurs and innovative risk-takers. We offer a variety of choices in education and have the world’s most talented and caring health care professionals. And of course, our province has the most diverse and beautiful landscape to explore in the world. All of this, along with our commitment to a competitive business environment and fiscal responsibility, make Alberta attractive for investment.
