Austerity Budget looks 'back to the future' of reliance on oil revenue.
by Shannon Stunden Bower
In budget 2013, Alison Redford’s Progressive Conservatives promised once-in-a-generation change. People across Alberta and Canada watched with interest, anticipating that this might at last be the moment when an Alberta premier finally moved to right the serious problem with the province’s fiscal situation.
Over-reliance on volatile and unsustainable natural resource revenues have long left Albertans vulnerable to fluctuations in international markets, with the province’s programs and infrastructure suffering in times of low prices for Alberta oil, gas, and bitumen. The optimistic among us thought that, with depressed prices for Alberta bitumen currently throwing the matter into stark relief and with public and expert opinion lining up strongly in favour of meaningful revenue reform, surely this was the time to set Alberta on a path toward long-term financial stability.
With a passing gesture to the memory of Peter Lougheed, Redford’s government took us back to the days of Ralph Klein.
But make no mistake: this is not necessity — this is ideology. The matter is made clear through attention to the reality behind the scare-tactic of the bitumen "bubble" and the oft-made claim that Alberta is a big-spending province, neither of which is true.
The price differential affecting Alberta petroleum exports is long-standing, and fluctuations are normal operating procedure. Also, relative to the spending of other provinces, Alberta per capita program expenditures have ranked in the middle of the pack for over a decade — and that’s without adjusting the figures to reflect how things cost more in this province.
Beyond the government’s failure to solve the basic problem underlying Alberta’s finances, Albertans will find other reasons to be disappointed with budget 2013. Redford’s government has identified health as a priority and increased spending by three percent. However, this falls far short of the increase necessary to make up for inflation, population growth, and population aging, and so amounts to a cut. Further, health care costs are largely driven by social determinants such as poverty and inequality. Cutting human services by $9 million is a recipe for skyrocketing health care costs not very far down the road.
Budget 2013 includes some capital spending, with commitments to expand the provincial highway network and to build new education and healthcare facilities. But in the absence of increases to operational funding, Albertans are left wondering who will staff these new facilities. Ultimately, it is not new hospitals but the expert and caring people who work within them that safeguard the health of Albertans.
Alison Redford’s Progressive Conservatives have put forward an austerity budget, just as the world is waking up to the reality that austerity does not work. In fact, the lost jobs and wages that result from drastic cuts in government budgets serve to impede economic growth.
Alberta’s so-called “hold the line” budget amounts to a “hold the phone” budget, as once again Albertans are being made to put real progress on hold until natural resources prices recover. This is an approach ill-befitting a province justifiably proud of its independent spirit.
pronounced income inequality in Alberta, which hinders our economic and social wellbeing. We might have expected that Redford would take seriously the expressed desire of a substantial majority of Albertans for meaningful revenue reform through mechanisms — such as progressive taxation and increased corporate tax rates — that also serve to rein in harmful inequality.
Alberta’s so-called “hold the line” budget amounts to a “hold the phone” budget, as once again Albertans are being made to put real progress on hold until natural resources prices recover. This is an approach ill-befitting a province justifiably proud of its independent spirit.
Albertans want to pay their own way, to establish a fair tax system that will correct the problem of funding efficient core services out of volatile, unsustainable natural resources revenues. Budget 2013 makes clear that Premier Redford, while apparently keen to align herself with the Conservative premiers of the past, is out of touch with the pressing needs and expressed desires of present-day Albertans. The government is correct in signaling the need for transformative change. But that is not enough. Alberta needs real leadership that will look to the future and not take us back to the past.
About Shannon Studen Bower
Shannon Stunden Bower is the research director at the Parkland Institute, a public policy research network affiliated with the Faculty of Arts at the University of Alberta. She holds a PhD in Geography from the University of British Columbia. Prior to joining the Parkland Institute, she was a postdoctoral fellow in the Department of History and Classics at the University of Alberta.
Stunden Bower has a background in social and environment justice issues, and is the author of numerous reports and articles dealing with historical, geographical, and public policy issues. Her first book, Wet Prairie: People, Land, and Water in Agricultural Manitoba (UBC Press, 2011), was awarded the Clio Prize in the Prairie Provinces by the Canadian Historical Association and the K.D. Srivastava Award by UBC Press.
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