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Alberta

Alberta government must do more to avoid red ink

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From the Fraser Institute

By Tegan Hill

As Albertans look toward a new year, it’s worth reviewing the state of provincial finances. When delivering news last month of a projected $4.6 billion budget surplus for fiscal year 2024/25, the Smith government simultaneously warned Albertans that a budget deficit could be looming. Confused? A $4.6 billion budget surplus sounds like good news—but not when its on the back of historically high (and incredibly volatile) resource revenue.

In just the last 10 years, resource revenue, which includes oil and gas royalties, has ranged from a low of $3.4 billion in 2015/16 (inflation-adjusted) to a high of $26.1 billion in 2022/23. Inflation-adjusted resource revenue is projected to be relatively high in historical terms this fiscal year at $19.8 billion.

Resource revenue volatility is not in and of itself a problem. The problem is that provincial governments tend to increase spending when resource revenue is high, but do not similarly reduce spending when resource revenue declines.

Overall, in Alberta, a $1 increase in inflation-adjusted per-person resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year, but a decline in resource revenue is not similarly associated with a reduction in program spending. Over time, this pattern has contributed to historically high levels of government spending that exceed ongoing stable levels of government revenue.

And while the Smith government has shown some restraint, spending levels remain significantly higher than reliable ongoing levels of government revenue. Put simply, unpredictable resource revenue continues to help fund Alberta’s spending—and when resource revenues inevitably fall, Alberta is at high risk of plummeting into a deficit.

Indeed, Finance Minister Nate Horner continues to emphasize that we are “living in extremely volatile times” and warning that if oil prices fall below $70.00 per barrel a budget deficit is “very likely.” According to recent forecasts, the price of oil may hit $66.00 per barrel in 2025.

To avoid this fate, the Alberta government must do more to rein in spending. Fortunately, there’s plenty of options.

For example, the government spends billions in subsidies (a.k.a. corporate welfare) to select industries and businesses every year. A significant body of research shows these subsidies fail to generate widespread economic benefits. Eliminating this corporate welfare, which would generate significant savings in the budget, is a good place to start.

If the Smith government fails to rein in spending, and Alberta incurs a budget deficit, it will only mean more government debt on the backs of Albertans. And with Albertans already paying approximately $650 each in provincial government debt interest each year, that’s something Albertans simply can’t afford.

With a new year set to begin, the Smith government continues to warn of a budget deficit. But rather than simply prepare Albertans for more debt accumulation—financed by their tax dollars—the government should do more to avoid red ink. That means cutting wasteful government spending.

Tegan Hill

Tegan Hill

Director, Alberta Policy, Fraser Institute

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Alberta

Former Chief Judge of Manitoba Proincial Court will lead investigation into AHS procurement process

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Deputy Minister of Jobs, Economy and Trade Christopher McPherson has issued the following statement on an independent third-party investigation into procurement and contracting processes used by the Government of Alberta and Alberta Health Services (AHS):

Deputy Minister of Jobs, Economy and Trade Christopher McPherson has issued the following statement on an independent third-party investigation into procurement and contracting processes used by the Government of Alberta and Alberta Health Services (AHS):

“While serving as Acting Deputy Minister of Executive Council, Premier Danielle Smith asked me to establish a credible, independent, third-party investigation into the procurement processes used by the Government of Alberta and AHS and their outcomes.

“I have informed Premier Smith that the Honourable Raymond E. Wyant, former Chief Judge of the Provincial Court of Manitoba, will lead this investigation. I asked Premier Smith to issue a ministerial order to facilitate his work and she has done so. Judge Wyant’s work on this matter begins immediately.

“Judge Wyant was appointed to the Manitoba bench in 1998 before becoming Chief Judge in 2002. Prior to his service on the bench, Judge Wyant worked as a criminal defence lawyer and Crown attorney and was acting deputy director of Manitoba prosecutions at the time of his appointment to the Bench. He has also taught law for many years at Robson Hall at the University of Manitoba.

“Judge Wyant will review the relevant legislation, regulations and policies related to procurement typically used by Government of Alberta departments and agencies, specifically AHS, and their application to the procurement of pharmaceuticals and to services offered by chartered surgical facilities. Questions that Judge Wyant will consider are outlined in the attached terms of reference, and include whether or not any elected official, Government of Alberta or AHS employee, or other individuals, acted improperly during the procurement processes. Judge Wyant will make recommendations to the government for improvement or further action as appropriate.

“Appointed under the Government Organization Act, Judge Wyant will operate independently of government. The Government of Alberta will provide Judge Wyant with access to all relevant documents held by its departments and AHS, as well as facilitate interviews with relevant individuals.

“Judge Wyant has been given a budget of $500,000 to undertake this important work, including to retain legal and audit assistance at his discretion. He is being paid $31,900 per month, which is the same remuneration rate as the Chief Justice of the Alberta Court of Justice.

“To ensure additional independence, Service Alberta and Red Tape Reduction will hold the budget for this third-party investigation.

“Judge Wyant will deliver an interim written report by May 30, 2025. A final written report and recommendations will be delivered by June 30, 2025, and it will be posted on alberta.ca.”

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Alberta

Province announces funding for interim cardiac catheterization lab at the Red Deer Regional Hospital

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Alberta’s government is partnering with the Red Deer Regional Health Foundation to expedite the delivery of life-saving cardiac services to central Alberta residents.

Alberta’s government is partnering with the Red Deer Regional Health Foundation to expedite the delivery of life-saving cardiac services to central Alberta residents.

Alberta’s government is committed to ensuring that Albertans have access to the health care they need, including life-saving cardiac care and lab services, no matter where they live. For those in central Alberta, the Red Deer Regional Hospital Centre plays a critical role in providing that care, which is why the $1.8-billion Red Deer Regional Hospital Centre redevelopment project includes two state-of-the-art cardiac catheterization labs.

While the project is expected to be completed by 2031, the government recognizes the urgent need for cardiac services for the 450,000 Albertans from Red Deer and surrounding rural communities. If passed, Budget 2025 will provide $3 million in startup funding and ongoing funding to cover the operational costs for an interim cardiac catheterization lab at the Red Deer Regional Hospital Centre.

“Every Albertan should have access to the health care services they need close to home. Albertans living in the Red Deer area have long advocated for a cardiac catheterization lab and I am pleased to support a project that we know will help save lives.”

Adriana LaGrange, Minister of Health

A cardiac catheterization lab is a dedicated space where specialized teams can carry out diagnostic tests that examine and evaluate heart function to aid in the diagnosis of cardiac health concerns and treatment of coronary artery disease. The lab will be equipped with specialized imaging equipment to allow for cardiac procedures primarily including ablation, angiogram and angioplasty.

The interim cardiac catheterization lab will be located within the existing Red Deer Regional Hospital Centre in a space currently being used as a physician’s lounge. Preliminary design plans are already in place and construction is expected to begin by fall 2025.

The Red Deer Regional Health Foundation has committed to funding the capital cost of the project, which is expected to be about $22 million.

In October 2024, the foundation announced the signing of a memorandum of understanding with Alberta Health Services to fast-track the opening of a cardiac catheterization lab at Red Deer Regional Hospital Centre.

“We are incredibly grateful for the generosity of the Donald and Lacey families, whose support is bringing life-saving cardiac care closer to home for the benefit of all central Albertans. Together with all our health care partners, their commitment to advancing health care will make a lasting impact on countless lives for years to come.”

Manon Therriault, chief executive officer, Red Deer Regional Health Foundation

The foundation’s work is made possible by the generosity of donors, supporters and champions across the region. To support the development of the interim cardiac catheterization lab, the foundation announced a $10-million donation from the John Donald family.

“I am pleased to support the development of cardiac services in central Alberta, something we’ve long advocated for. This initiative will provide essential care to our community and ensure that more lives are saved closer to home.”

John Donald, Red Deer Regional Health Foundation donor

By prioritizing the development of an interim cardiac catheterization lab, patients will have access to critical services about three years earlier than expected. The interim cardiac catheterization lab is expected to be operational in early 2027.

“Developing this lab will allow us to treat more cardiac patients closer to home and support them in their recovery. Enhancing our cardiac services will also support our efforts to recruit and retain the talented professionals needed to care for our region’s patients.”

Janice Stewart, chief zone officer, Alberta Health Services Central Zone

Being able to meet the needs of the province’s rapidly growing population is a top priority for Alberta’s government.

Quick facts

  • The $1.8-billion Red Deer Regional Hospital Centre redevelopment project will upgrade several services throughout the hospital site, including:
    • an additional patient tower
    • six new operating rooms
    • a new medical device reprocessing department
    • two new cardiac catheterization labs
    • renovations to various areas within the main building
    • a newly renovated and expanded emergency department
    • a new ambulatory clinic building to be located adjacent to the surface parkade

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