Past Alberta governments have taken taxpayers for a ride. After more than a decade of frivolous spending, Albertans are now being overcharged by $10 billion every year compared to taxpayers in peer provinces. But in the upcoming budget, Premier Jason Kenney and team can change that by presenting a plan that finally brings the government’s spending in line with other provinces and stops overcharging taxpayers.
The Blue Ribbon Panel, led by former Saskatchewan New Democratic finance minister Janice Mackinnon, clearly diagnosed Alberta’s budget problem. The panel found that Alberta’s per-person spending is the highest in Canada and the government would spend $10 billion less every year if it brought its spending levels in line with the other large provinces. Or, to quote MacKinnon, “Alberta has a spending problem.”
The Alberta government has a multi-billion-dollar-deficit and debt tab that is approaching $100 billion because it spends way too much, not because of a lack of revenue. Even with last year’s relatively low non-renewable resource revenues, the Alberta government still brought in more revenue per-person than British Columbia.
Where should the government be cutting?
When it comes to corporate welfare, it’s time for the Alberta government to clean house.
There’s nearly $7 billion worth of corporate welfare commitments and more than a dozen programs that the Alberta government should scrap. Everything from niche tax credits for favoured industries to subsidies for petrochemical firms, digital media companies, oil upgraders and venture capitalist must all go.
If there ever was a politician who understands the dangers of corporate welfare, it should be Kenney. In the 1990s he pushed for legislation to outlaw business subsidies.
“For too long, politicians have pretended that they were businessmen, investing with other peoples’ money and they made an absolute failure out of it,” stated Kenney in 1995.
The government also needs to address its ballooning bureaucracy.
Many Albertans outside of government have been hit hard over the last few years, with layoffs and many still being unemployed or underemployed. But instead of relief, taxpayers have been forced to shell out more tax money to pay for a growing government roster where many occupations are eligible to earn significantly more than their counterparts in other provincial governments.
The Alberta government added over 10,000 employees and increased total compensation costs by 12 per cent during the downturn. With total workers’ pay in the province still lower than pre-downturn highs, the Alberta government should reduce its wage bill to 2014 levels, saving taxpayers over $2 billion every year.
Billions more could be saved every year by bringing infrastructure costs, spending on doctors and post secondary education in line with other provinces.
But the government shouldn’t stop there, all areas of the budget need to be on the chopping block. Kenney may have hoped to maintain the overall health-care budget while campaigning, but that was before he found out that Alberta taxpayers spend way more than other provinces, but don’t receive better results.
Despite spending $1,000 per-person more than people living in Ontario, Alberta’s wait times, from referral from general practitioner to treatment, are 10 weeks longer.
It’s clear that throwing more money at the government health-care system doesn’t mean better results. Alberta already spends more per-person for health care than any other province except Newfoundland and Labrador and taxpayers would save $2.7 billion every year if the government brought its health-care budget (excluding doctor costs) in line with other large provinces. So why shouldn’t Kenney look for ways to provide better results at a lower cost to taxpayers, like other provinces?
Some people can’t even conceive of cutting, but they need to recognize just how bloated our provincial government is compared to other provinces. It’s time to begin rolling back the years of runaway spending. And it all needs to start with Kenney’s first budget.
This column was originally published in the Edmonton Sun on October 23, 2019.
Is Canada Off Track?
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