On June 20, tens of thousands of households and businesses had to throw their plans for the current year out the window. Nearly every single family and business affected by the flood has been forced to change their vacation plans, their budgets and savings plans for the current year, and potentially for many years to come. (Photo: Wikipedia/Flickr/Ryan Quan)

It stands to reason that a provincial government already running a $5.1-billion deficit this year would have to make some substantial alterations to its own budgetary framework if it too were significantly affected by the flood.

BMO estimates that damages from the flood could run between $3 billion and $5 billion. Premier Alison Redford has pledged that the provincial government will pay for all uninsured damages, in addition to damaged and destroyed public infrastructure. Repairing our homes, businesses and infrastructure is necessary, but it will also be costly.

TD Bank estimates that the cost to Alberta’s economy in the short term will be between $500 million and $1.5 billion, and according to BMO, it could be up to $2 billion nationally. The result is likely to be a moderate reduction in projected revenues for the province this fiscal year, although still historically high.

Between spending commitments that could reach up to $5 billion at the upper end, and a potential reduction in revenues, it’s safe to say that Alberta’s budgetary plan for 2013-14 is hardly worth the paper it was printed on. Like every household and business affected by the flood, our government must make alternations to its spending plan.

Last week, the Canadian Taxpayers Federation called on the premier to recall the legislature once the urgency of the crisis has passed, in order to introduce a new emergency budget. Both Redford and Finance Minister Doug Horner rejected the idea immediately upon hearing it, insisting that everything was fine and that no changes to the budget would be necessary.

That might have been the case if the flood occurred in 2009. In fiscal year 2009-10, Alberta had $16.8 billion in the so-called rainy day fund, also known as the Sustainability Fund. But that money was spent during sunny days, and the Canadian Taxpayers Federation estimates that it will soon be depleted based on pre-flood spending commitments. It was spent or borrowed against to the point where Alberta effectively has nothing left in the rainy day fund, now that we actually need it.

But the money has to come from somewhere. Anyone who has seen the devastation knows that we must rebuild and get back on our feet.

As the urgency of the disaster begins to pass, Premier Redford should reconsider her initial reaction to the proposal of an emergency budget. Her handling of the flood in the short term has been commendable, but she would be remiss if she gave no attention to how she will pay for it in the long term.

An emergency budget in August that reallocates resources from existing spending envelopes to flood relief would potentially find all-party support to rush it through the legislature. MLAs in all parties, in all parts of the province, know how serious the situation is, and nobody would tolerate playing politics at this point.

It’s a chance for the premier to rise to the occasion and show that, in times of crisis, she is the leader of all Albertans and has a long-term plan to pay for the rebuilding efforts. Alberta was already on track to run large, annual deficits and rack up $15 billion in debt over the next three years.

That was an irresponsible course to chart in good times. To continue on it without any alteration when we face a flood bill of up to $5 billion, would be a financial disaster in its own right.