UCP Lie #2: Government is Spending Beyond Our Means

Alberta’s public-sector spending ins the lowest in the country in proportion to our economy.  We have the lowest number of people working in the public sector as a proportion of our labour force than any other province.  So where is the money going and where isn’t it coming from?

 

Alberta is technically out of the recession caused by the recurring collapse of world oil prices, but it doesn’t feel like it to most Albertans.  Those old-oil and gas companies, who control most of our old-economy, are insulated because they are holding on to lots of passive cash.  They are also getting billions of dollars in tax cuts from the Kenney regime while he goes to “War” against public-sector unions and teachers.

The mantra is Alberta has a growing debt and an undisciplined attitude toward deficit and the only solution is reduced government spending.  This political fiscal ideology of the Kenney-controlled UCP is an echo from the 1993-97 period of Ralph Klein’s epic failed Alberta Advantage where the budget options were Brutal or Massive Spending cuts.

There is a fundamental philosophical problem with this myopic and shallow approach to fiscal policy that presumes all debt is a disaster.  It’s not.  It depends on the reasons for the debt.  Productivity improving and innovation adopting debt is an investment.

Borrowing for day-to-day operations or transferring savings from the Heritage Fund for the same purpose is bad debt.  It also transfers the burden to future generations.  That is totally unfair, irresponsible and unnecessary, but we need the integrity to raise the required revenues to pay our way in the present for the services we expect and demand from governments.

Albertans have been irresponsibly using nonrenewable resource revenues to supplement current public program operations for decades.  This is another destructive myth embedded in the Alberta Advantage, that the lowest taxes are a competitive advantage.

If it were true that low taxes are an economic attractor why didn’t the 65,000 Fly-in-Fly-out oil sands workers from other provinces not just move here. Why did they choose to leave their families for long periods of time to work in Fort McMurry and short return home times as they toiled for us and our oil?  If they moved here it could have been their oil too but most didn’t move here even with low taxes.  In fact, they paid taxes in their home province, not in Alberta, as we also paid for their travel and accommodation costs as well.

If low taxes were the ultimate investment attraction why has Shell, Total,  Devon, Statoil, ConocoPhillips, and others divested and left Alberta?

The policy lie perpetrated by the Kenney UCP government is we can’t afford the cost or the kinds of public services we have been getting and it’s the fault of the NDP and public sector unions.  The evidence to support this ideological deceit is not there.

That doesn’t mean we can’t improve on the systems to make them more efficient, effective and deliver greater value for Albertans, but in many ways, beyond and including costs.  But Kenney is more about fixin’ for a fight than fighting for a fix.

 

 

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