Alberta’s budget misses the mark

Majority of Albertans favour more revenue, rather than slashing services.

by Ricardo Acuña

In his speech delivering Alberta's 2013 budget, Minister of Finance Doug Horner referred to this budget as a "once-in-a-generation restructuring". He also said the budget was based on the priorities and wishes of the people of Alberta who told the government "they expect a budget that is responsible, balanced and facilitates economic growth." After hours of digging through the budget documents in-depth, however, there is no evidence to support either of these statements.

The only restructuring evident is that instead of one budget, the government actually presented three: an operating budget, a capital plan and a savings budget. There is a strong argument to be made that, at least in accounting terms, it makes good sense to separate out the numbers into these three key areas. It is a fairly common practice to budget and track operations, physical assets and financial assets separately. Different strategies and goals are required in each area and it can therefore be argued that each area deserves its own budget.

Of course, it could also be argued that separating the provincial budget into three separate documents was little more than a shell game by the Conservatives to make it next to impossible to identify the total annual deficit and debt ,and to make it even harder to compare expenditures and revenues with the previous year.

Either way, the shift from one budget to three does not, in and of itself, represent anything close to a "once-in-a-generation restructuring". It just represents moving the numbers around in a type of fiscal shell game.  The main essence of the budget itself has not changed in any significant way.

We're still dealing with a fiscal framework that is overly dependent on non-renewable resource revenues, makes education, health care and human services completely contingent on the price of oil and is willing to sacrifice the interests of the majority of Albertans in order to protect the wealth accumulation of the one percent. All of these things were true when Ralph Klein got hold of the provincial budget in 1993 and they remain true today. Where is this massive restructuring?

As for the expressed wishes of Albertans, it really is difficult to fathom exactly which Albertans the government chose to listen to. A plethora of economists, on both the right and left of the ideological spectrum, have spent the last six months telling anyone who will listen that Alberta's fiscal future depends on fixing the province's revenue problems.

Right-wingers like Jack Mintz have repeatedly called for a sales tax to ensure adequate funding for our public services, while folks on the centre and the left, like the Parkland Institute, have pointed to a progressive tax structure and increased corporate taxes as the way forward. Either way, the consensus is broad: Alberta has a revenue problem that needs to be fixed.

However, beyond economists and think-tanks, Albertans themselves have made their fiscal priorities clear time and time again. A pre-budget report released by the Parkland Institute included polling data from the University of Alberta's Population Research Laboratory showing that 60 percent of Albertans agreed or strongly agreed with adding some degree of progressivity to our tax system.

This was supported by an Environics poll commissioned by the Alberta Federation of Labour earlier this year, which found that 72 percent of Albertans favoured a return to a progressive tax and 77 percent favoured an increase in corporate taxes and taxes for the very wealthy. The same poll found that over 70 percent of Albertans rejected the notion of cuts to public services as a way of balancing the books. Even the Wildrose Party's "alternative" budget included a multi-billion dollar deficit because they also refused to change the revenue stream.

Again, the polling shows a pretty clear consensus among Albertans about the changes needed in Alberta's fiscal framework. Somehow, however, the government who claims to have heard both the economists and Albertans at large, decided instead to present a budget with no changes to the province's revenue stream, funding to "priority" areas that fails to keep up with population growth and inflation, and a multi-billion dollar deficit.

Budget 2013 was indeed an opportunity for the provincial government to listen to Albertans and fundamentally transform the province's fiscal structure. Despite their rhetoric, however, the government passed up this opportunity in favour of maintaining and defending the dysfunctional status quo. The question Albertans have to ask themselves today is, "Why?" The answer to that question will reveal exactly who this government is working for and listening to — because it's certainly not the majority of us.

See also Albertans reject austerity

© Copyright 2013 Ricardo Acuña, All rights Reserved. Written For: StraightGoods.ca