BY DEREK FILDEBRANT
Former Progressive Conservative Premier Alison Redford left a trail of fiscal wreck and ruin in her wake. Yet, a reversal of deficits, debt and overspending has not happened since her departure. Despite efforts by her party to erase her from history, the PC caucus just unanimously passed her budget that takes on $21 billion in debt and continues to run a massive deficit.
The next leader of the PC Party and premier of our province is going to have a large fiscal mess to clean up. Changing the name of the leader will not suffice if nothing changes in substance.
Restore straightforward financial reporting
When former Alberta Treasurer Jim Dinning passed the Government Accountability Act (GAA) in 1994, he declared that, “[A future government] will not be able to water the standard [reporting] down without looking at the whites of the eyes of Albertans and say, ‘We’re going to deliver to you substandard government.’” But that is precisely what Redford and her finance minister, Doug Horner did when they repealed the GGA last year.
For two years, the PCs have intentionally confused the financial reporting of the province to obfuscate the real balance of spending and revenues for the province. That is, they have hid the deficit.
The PC government also repealed Ralph Klein’s Fiscal Responsibility Act, effectively abolishing any legal definition of debt. This conveniently allows the government to rack up $21 billion in debt, but to not actually have to call it debt. Instead, Redford called it “hope.”
This is not a conservative-liberal issue, but an issue of basic government accountability and honesty.
Redford, Horner and most of the PC caucus attacked the Canadian Taxpayers Federation (CTF) for contradicting their budget numbers in recent years, but time, and most experts – including the Auditor General – have proven us right.
This month, the government’s last two budgets were brutally slammed by the Auditor General for not adhering to “basic public sector accounting standards.” By the usually milquetoast language employed by auditors, this translates as a foul-mouthed expletive in regular English.
Balance the budget
After being honest with Albertans about the true state of the province’s finances, the PCs need to balance the budget, and fast. Redford promised during the election to do it by this spring, but her government didn’t even come close.
When we cut through the funny-money reporting in the government’s budget, the CTF estimates that they will run a deficit of $3.9 billion. This is inexcusable when oil is running at $104 a barrel and tax revenues are at an all-time high.
The CTF projects that under the current fiscal plan, the PCs will continue to run large deficits well into the future unless there is a major change in fiscal policy or a war in the Middle East.
Pay down the debt
The PCs running against Klein’s accomplishment of a debt-free Alberta is like the NDP running against Tommy Douglas’s accomplishment of universal healthcare. The government’s latest budget takes Alberta a further $5 billion into debt this year, and will leave the province in a $21 billion hole by 2016.
This is short-term gain for long-term pain that Albertans will have to pay for, and as we learned in the 1990s, paying for it can be very painful.
After being in power longer than East Germany’s Communist Party (43 years), the broad fiscal policy of this government is not its only problem; but if the successor to Redford and Hancock has any hope of keeping the province from going off the fiscal cliff, then this short list is the minimum for consideration.
Derek Fildebrandt is the Alberta Director of the Canadian Taxpayers Federation.