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Brace Yourselves. Alberta’s Budget Roller-coaster Is on the Move

Boom, bust and repeat cycle ahead as the UCP fails to tackle resource dependency.

David Climenhaga 1 Mar 2024Alberta Politics

David J. Climenhaga is an award-winning journalist, author, post-secondary teacher, poet and trade union communicator. He blogs at Follow him on X at @djclimenhaga.

Good morning, Alberta! It’s March 2024, and we’re still on the royalty roller coaster.

It feels as if we’re easing back into the bust portion of the formula, and it’s still no fun.

Well, it’s not as if we all didn’t know this was going to happen again, even if Finance Minister Nate Horner’s Leap Year Budget Speech Thursday hadn’t just made it perfectly clear.

We all understand that a $2-billion payment to Peter Lougheed’s famously all-but-drained Heritage Savings and Trust Fund isn’t going to get us off the scary Boom-&-Bust-o-Later ride we’ve been stuck on as long as anyone can remember.

Anyway, it’s not as if Premier Danielle Smith’s United Conservative Party government is going to keep its promise to continue feeding a few pennies into the Heritage Fund every year any more than it kept its pre-election vow to cut taxes by creating a new eight-per-cent bracket for folks earning less than $60,000 and $760 in tax cuts each for everyone else.

“After all, it’s your money,” Smith enthused in a news release about the “permanent, billion-dollar tax cut” back on May 1 last year. “You earned it, not the government.”

But that was then and this is now. The election’s over, the UCP won, and it turned out the government needed the cash after all to hide the fact that Alberta’s back in deficit despite having $17.3 billion in fossil gas and bitumen royalties in hand.

Even the UCP’s new “implementation schedule is contingent on the province maintaining sufficient fiscal capacity to introduce the tax cut while maintaining a balanced budget,” Horner’s budget document cautioned.

So you’re outta luck, folks. Maybe later. Maybe not even then.

Not that cutting taxes in Alberta is going to fix what ails the place. In fact, it would probably have had the contrary effect. But, as they say, it’s not the lousy $760 bucks, it’s the principle of the thing!

This budgetary sleight of hand has allowed the government to forecast an “accounting surplus” for the fiscal year — a meaningless $367 million, which inevitably will be described as “razor thin” by journalists and commentators.

It is meaningless because of its relative size compared to the $73.2 billion the government says it expects to spend this year, rising to $76.2 billion by 2026-27.

Of course, this too is mostly fiction, likely to be blown away by the cost of fighting forest fires, compensating farmers for drought, keeping frontline health-care workers on the job and the always possible one-per-cent (or larger) downward adjustment in the estimated price fetched by Alberta’s heavy oil, the dirty basket in which all our eggs continue to be placed.

As the Canadian Press explained in its budget coverage, “the $2 billion the government has reserved for contingencies such as drought and wildfire is about a third less than what was spent last year on those disasters.” And everyone understands that between the drought and the global climate change that is causing it, this summer is likely to be worse.

So, in effect, bogus assumptions notwithstanding, we are in deficit already.

Avoiding deficits at all costs, it must be noted, is highly overrated, and may even be bad for the economy. But since we have made it an article of religious faith here in our landlocked Wild Rose cargo cult, we have to live with that too.

Well, we can be confident at least that the government won’t be spending much trying to solve the homelessness crisis gripping Alberta — which is arguably the most serious human rights, security and public safety emergency Alberta faces. The UCP isn’t interested in that, and neither is the media.

Pointless fights with Ottawa cost money too.

Likewise, while the government is prepared to spend enough to keep our health care and education systems on life support, and to brag about it as if it were a virtue, that’s about all this budget does for those files.

As the NDP pointed out in its response, Horner’s budget includes no plan to build the public hospitals Albertans need, especially the ones in South Edmonton, Airdrie and Lethbridge.

“The budget conservatively estimates population growth and inflation will be a combined 6.2 per cent but spending is stalled at 3.9 per cent,” the Opposition party said in a news release. “The result is Albertans will not receive the basic services they need in health and education.”

Alberta Teachers Association president Jason Schilling says classes remain so understaffed and overcrowded that the province needs to hire 5,000 more teachers.

The UCP, meanwhile, is prepared to spend another $70 million this year alone on Smith’s vanity restructuring of Alberta Health Services, which seems principally intended to satisfy the UCP base that revenge is being exacted on managers for vaccine mandates during the pandemic. And it’s pumping money into unwelcoming private and religious schools.

This allows Smith and her ideologues to set the stage for more privatization, of course, which suits them just fine.

You can pick up the details spun the government’s way in its news release and a little more cautiously in various news reports.

I’m sorry, Alberta, but after a run longer than The Phantom of the Opera, the only thing that will bring this gong show to an end is a sales tax.

To borrow Horner’s metaphor, we demand champagne services and insist on a beer budget, and not craft beer either. This has given us two political parties justifiably frightened of adopting the only answer to the royalty roller coaster that will work to end Alberta’s wild ride.  [Tyee]

Read more: Politics, Alberta

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