National Post

Alberta’s red-ink lesson for the rest of Canada
National Post

Alberta’s Finance Minister, Doug Horner, has announced that this year’s provincial deficit could hit $4-billion. This red ink is not just the result of weaker resource revenues, as Alberta Premier Alison Redford regularly claims. It also reflects short-sighted spending decisions, the effect of which has accumulated for years.

Back in 2005/06, resource revenues flowing into Alberta’s provincial coffers hit a peak of $17.1-billion (in real dollars). The budget estimates for the current year show revenues dropping to $11.2-billion. But now turn to the other side of the ledger: the spending side. Roughly 85% of Alberta’s budget goes to program spending, and much of that is spent on public-sector compensation.

Part of the problem has been generous collective agreements. To cite just one example: In 2007, the province signed a five-year deal with the teachers’ union that provided for raises over that period that were double the rate of inflation — despite the fact that Alberta’s teachers already were the best paid in the country.

How would Alberta’s finances look now, even with the revenue decline, if the province had increased program spending since 2005, but had done so only to the extent of inflation plus population growth? Crunch those numbers and you find that, compared to such a baseline scenario, Alberta spent an extra $22.1-billion.

Depuis quelques années déjà, l’Alberta se gauchisait. Avec l’élection d’Alison REDford, c’est maintenant à gauche toute. Encore une fois, une autre preuve éloquente que la gauche n’est bonne qu’à détruire…

Le bon côté de l’affaire ? Un appauvrissement de l’Alberta signifie une diminution de la péréquation. Une diminution de la péréquation va obliger le Québec à se prendre en main.