Spinning Wheel – the Alberta Budget 2019

What goes up must come down – Spinnin’ wheel got to go ’round                                  David Clayton-Thomas

The Alberta United Conservative Party (UCP) defeated the New Democrats (ND) using the narrative that the NDs were spendthrifts.  

The UCP promised to issue a budget in mid-October. In preparation for the budget, it established a panel of experts to examine government expenditures. Meanwhile, they pushed through carbon tax repeal and corporate tax reductions that reduce government revenue. And internally, government departments have been put on a ‘diet’ to reduce spending.

The evitable conclusion of the panel will be that Alberta has a “spending problem” and a series of recommendations will propose budget reductions.  Given the size of the deficit, reduced revenue and a 2 year timeframe to achieve balance, deep cuts can be expected.

So the government has been busy this summer laying the groundwork for the narrative they plan to use regarding the budget. The story the UCP will sell can be found in the latest fiscal report tabled in August.

Instead of the usual detailed accounting for departments and future forecasts the UCP issued a 4-page update. It only compared first quarter results with last year’s but devoted half the report to detailing the provincial debt. 

That said, the deficit figures spell out a problem:

  • $1.9 billion in interest payments annually (more than the budget of most departments).
  • An operating budget deficit of $835 million (down from $1.2 billion the previous year)
  • A capital budget deficit of $870 million (down from $1.7 billion the previous year)
  • Revenue of $13.4 billion about the same as last year.

The deficit situation appears gloomy although severely normal Albertans might be somewhat wary of the incomplete report.

The UCP ‘spin’ did show up in the report’s debt story. The report pegged it at $80 billion.  But they included $18 billion in debt the municipal and agriculture lending corporations incur that isn’t provincial taxpayers’ debt. The added in a further $5 billion for a contingency fund that wasn’t spent. And they included a chart that showed forecasted accumulated debt that wasn’t based on recent actual results.

The UCP and NDs after a deeply divisive election, are intent on ‘torquing’ the budget story to fit their ideology. And one can expect the spin from the report to the budget presentation to be nausea-inducing.

Severely normal Albertan should be hoping that the panel report presents the facts in a clear and unbiased way.  The panel only looked at expenditures so the report will be incomplete to begin with.  In addition to balancing the budget; there is a need for ‘balance’ in the services that are delivered.

Severely Normal Albertans should also hope that the reporting approach of the Finance Minister returns to the trustworthy standards of previous years. Just let the facts speak for themselves.

Finance Minister Travis Toews