Ron Orr: How far fair Alberta has fallen

Alberta’s economy is falling, as discussed in this week’s MLA column

Ron Orr MLA Lacombe-Ponoka

Ron Orr

MLA Lacombe-Ponoka

If you once thought that Alberta’s economy was the flower of Canada I have very sad news for you.

Alberta’s sub-national fiscal gap is third worst in all of Confederation, second worst among provinces, at 4.6 per cent of GDP, behind the Territories and Newfoundland.

Fiscal gap is defined as net debt-to-GDP levels. When this ratio expands that creates a “fiscal gap.”

This assessment that came out on September 28th comes from the independent Parliamentary Budget Officer (PBO) in Ottawa. The PBO accesses federal finances regularly. For the first time they also accessed provinces and the report is deeply disturbing for Alberta.

The PBO called Alberta’s current fiscal policy unsustainable over the long-term, confirming the negative impacts of NDP incompetence and financial mismanagement.

Only a part of this can be blamed on the price of oil. Alberta has suffered oil price declines before but has never compounded that with massive ideological mismanagement. This government’s policies have turned a correction into a catastrophe.

The PBO states that Alberta contributes more to the combined Sub-national “fiscal gap” than all the other provinces combined. Our share is 98 per cent of the combined total. Gasp.

Google PBO and read the report yourself.

Health care spending is identified as the key challenge to be addressed.

Nathan Cooper, UCP interim leader says “Yet another independent assessment of NDP fiscal policy has confirmed what United Conservative Party Caucus members have been saying for years: NDP mismanagement of Alberta’s finances has created a mess that will take generations to clean up. The NDP can start by immediately addressing health care spending levels, which are currently 20 per cent higher than in British Columbia for the same level of service.”

Is there any hope in this?


As an official opposition we are calling on the current government to drop their ideology and take immediate corrective action to contain the firestorm of spending and debt expansion.

The PBO says it will take increased taxes or spending restraint to make Alberta’s finances sustainable.

They estimate that permanent tax increases or spending reductions amounting to 4.6 per cent of provincial GDP ($14.1 billion in current dollars) would be required to achieve fiscal sustainability; either taxes go up 25 per cent, program spending goes down by 20 per cent or some combination of the two.

Alberta overspends, relative to other provinces on a per capita basis.

We must reign in overspending.

Tax revenue will not increase unless there is substantial business activity to create business and employment tax revenue. Increase economic activity; it will increase tax revenue.

This is achievable folks but it will take determination.

If we do not act responsibly it will be the younger generation who have to pay the massive debt and the interest. That is not fair. Every generation should pay their own way and not borrow against the next.

If you have any questions or concerns on this or any issue, feel free to contact me at my constituency office at 403-782-7725 or by e-mail or drop into the office 101, 4892 – 46 Street, Lacombe, AB T4L 2B6.

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