The red-ink budgets that have engulfed Alberta since the last recessionAlbertas Finance Minister Doug Horner just announced this years deficit could hit $4-billion are not accidental. Such red ink is not just the result of weaker resource revenues, as Alberta Premier Alison Redford regularly claims.
The last time Alberta was in a fiscal mess due to low energy revenues and over-the-top government spending, some politicians and pundits said what Albertans really needed was higher taxes. That was back in the late 1980s and early 1990s. Those voices were wrong then and they are wrong now.
For one thing, any fantasy that a tax hike will solve Albertas fiscal woes is the preserve of people who dream in tax-happy Technicolor.
Sure, tax reform is desirable. A provincial sales tax would be smart economic policy since sales taxes are some of the least harmful imposts.
When Alberta Premier Alison Redford took to the television screen the other night, she paid much attention to the revenue side of the governments books. On Albertas massive budget deficit, the premier blamed the below-world price that Alberta-based companies receive for oil.
More than three years after the end of the recession and Albertas provincial government continues to struggle with deficits, which as of the last quarterly update could reach $3 billion. Relying on revenues to rebound enough to catch up with spending just doesnt work as Albertas own history aptly demonstrates. Similarly, municipalities across the province continue to struggle to find sufficient resources for infrastructure needs while balancing their books.
A year ago the Alberta Government appointed a Critical Transmission Review Committee to determine whether the Alberta Electric System Operator's (AESO) proposal that two high voltage direct current (HVDC) north-south transmission lines be built because of occasional congestion on the Edmonton to Calgary corridor is reasonable. In spite of the availability of lower-cost alternatives, the Committee agreed with the AESO's proposal, the Redford government accepted the Committee's recommendation, and AltaLink and ATCO Electric are now in the throes of planning to commence construction.
When Ontario opposition leader Tim Hudak recently released a position paper that mused about reforming how Ontarians buy their beer, wine and spirits, the usual nonsensical non sequiturs were quickly offered up by those opposed to private liquor stores.
Ill get to the myths about private booze shortly. In general though, state-owned enterprises almost invariably mean losses for taxpayers, consumers or both.
A good example of the latter is the Liquor Control Board of Ontario (LCBO) itself, which runs the Ontario government liquor stores.
On a recent trip to Kenya, my friend and his family crashed head on into an example of why some developing countries cannot grow and prosper.
As they were about to board their flight from Nairobi, the clerk at the exit gate said there was a problem with their boarding passes. Before she returned them and before they could board the flight, they were told they must pay $800 to correct the problem.
When governments enter an election year, the political temptation to play fast and loose with budget numbers is strong. The most famous example of this was probably the 1996 budget in British Columbia. That year, then-B.C. Premier Glen Clarks office injected sunshine into revenue forecasts, this in order to trumpet a balanced budget on the campaign trail. His office did so over the objections of Finance Ministry officials. Post-election, once that became known, the fudge-it budget scandal permanently tarred the NDP government.
If there was any confidence that Albertas government would avoid imitating the failed policies of other provincesthink of Quebec and Ontario and their massive debtsthat faint hope for continued Alberta exceptionalism was kiboshed at the recent Progressive Conservative convention in Calgary.