Alberta
Alberta government must reform spending to avoid deficits
From the Fraser Institute
By Tegan Hill
According to Premier Danielle Smith, the Alberta government is creating a new committee—composed of the premier, Finance Minister Nate Horner, Technology and Innovation Minister Nate Glubish, three treasury board members, and three private members—to review government spending in the province. Smith says the committee will find savings so her government can deliver on the promised personal income tax cut. But in fact, the need for a thorough program review is much broader than that.
A bit of background.
During the election campaign, Smith promised to create a new 8 per cent tax bracket for personal income below $60,000, which is expected to cost provincial coffers $1.4 billion annually. While the Smith government’s 2024 budget delayed this tax cut, the premier recently said a “substantial” cut is coming soon.
According to Smith, the committee will review “every single program in every single department to see if there are ways that we can remove wasteful spending, move spending from low-priority areas to high-priority areas, find ways that we can use technology to be able to deliver services better, and accelerate that personal income tax cut.”
Again, the idea of a program-by-program review is a good one. But the goal must span beyond finding savings for a single personal income tax cut. Alberta has a big spending problem and it must be meaningfully addressed.
Simply put, Alberta governments have a bad habit of increasing spending during the good times of high resource revenue and budget surpluses, like the province is currently experiencing, but fail to rein in spending when resource revenues fall. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.
To be clear, the Smith government introduced a rule to limit increases in operating spending (e.g. spending on annual items such as government employee compensation) to the rate of population growth and inflation. But while this a step in the right direction, the government’s earlier spending increases since 2022 mean it continues to rely on relatively high—but very volatile—resource revenue to balance its budget.
Indeed, according to this year’s provincial budget, program spending this year will reach $14,334 per Albertan, which is $1,603 more per person (inflation-adjusted) than the government originally planned to spend in the 2022 mid-year budget update, Smith’s first fiscal plan as premier.
In total, the Alberta government will spend a projected $6,037 more per Albertan (inflation-adjusted) over four years from 2023/24 to 2026/27 than it planned in the 2022 mid-year budget update.
In other words, the government’s current plan to restrain spending by the rate of inflation and population growth is starting from a higher base level of spending. As a result, Alberta remains at risk of incurring a budget deficit when relatively high resource revenue declines.
For perspective, if resource revenue fell to its average over the last 10 years—rather than being at historic highs—the government’s $367 million projected surplus for this year would immediately fall to a deficit of $7.4 billion, even before the billion-dollar tax cut that Smith says is coming soon.
The Alberta government should use its program review to more closely align ongoing spending with stable ongoing levels of government revenue rather than onetime windfalls. Otherwise, Alberta will continue on its boom-and-bust rollercoaster that inevitably leads back to deficits and more debt.
Author:
Show your Alberta side. Buy Local. |
When the going gets tough, Albertans stick together. That’s why Alberta’s government is launching a new campaign to benefit hard-working Albertans.
Global uncertainty is threatening the livelihoods of hard-working Alberta farmers, ranchers, processors and their families. The ‘Buy Local’ campaign, recently launched by Alberta’s government, encourages consumers to eat, drink and buy local to show our unified support for the province’s agriculture and food industry.
The government’s ‘Buy Local’ campaign encourages consumers to buy products from Alberta’s hard-working farmers, ranchers and food processors that produce safe, nutritious food for Albertans, Canadians and the world.
“It’s time to let these hard-working Albertans know we have their back. Now, more than ever, we need to shop local and buy made-in-Alberta products. The next time you are grocery shopping or go out for dinner or a drink with your friends or family, support local to demonstrate your Alberta pride. We are pleased tariffs don’t impact the ag industry right now and will keep advocating for our ag industry.”
Alberta’s government supports consumer choice. We are providing tools to help folks easily identify Alberta- and Canadian-made foods and products. Choosing local products keeps Albertans’ hard-earned dollars in our province. Whether it is farm-fresh vegetables, potatoes, honey, craft beer, frozen food or our world-renowned beef, Alberta has an abundance of fresh foods produced right on our doorstep.
Quick facts
- This summer, Albertans can support local at more than 150 farmers’ markets across the province and meet the folks who make, bake and grow our food.
- In March 2023, the Alberta government launched the ‘Made in Alberta’ voluntary food and beverage labelling program to support local agriculture and food sectors.
- Through direct connections with processors, the program has created the momentum to continue expanding consumer awareness about the ‘Made in Alberta’ label to help shoppers quickly identify foods and beverages produced in our province.
- Made in Alberta product catalogue website
Related information
- Buy Local Alberta
- Made in Alberta Product Catalogue
- Alberta Agri-Food Products and Services Export Catalogue
Alberta
Province to expand services provided by Alberta Sheriffs: New policing option for municipalities
Expanding municipal police service options |
Proposed amendments would help ensure Alberta’s evolving public safety needs are met while also giving municipalities more options for local policing.
As first announced with the introduction of the Public Safety Statutes Amendment Act, 2024, Alberta’s government is considering creating a new independent agency police service to assume the police-like duties currently performed by Alberta Sheriffs. If passed, Bill 49 would lay additional groundwork for the new police service.
Proposed amendments to the Police Act recognize the unique challenges faced by different communities and seek to empower local governments to adopt strategies that effectively respond to their specific safety concerns, enhancing overall public safety across the province.
If passed, Bill 49 would specify that the new agency would be a Crown corporation with an independent board of directors to oversee its day-to-day operations. The new agency would be operationally independent from the government, consistent with all police services in Alberta. Unlike the Alberta Sheriffs, officers in the new police service would be directly employed by the police service rather than by the government.
“With this bill, we are taking the necessary steps to address the unique public safety concerns in communities across Alberta. As we work towards creating an independent agency police service, we are providing an essential component of Alberta’s police framework for years to come. Our aim is for the new agency is to ensure that Albertans are safe in their communities and receive the best possible service when they need it most.”
Additional amendments would allow municipalities to select the new agency as their local police service once it becomes fully operational and the necessary standards, capacity and frameworks are in place. Alberta’s government is committed to ensuring the new agency works collaboratively with all police services to meet the province’s evolving public safety needs and improve law enforcement response times, particularly in rural communities. While the RCMP would remain the official provincial police service, municipalities would have a new option for their local policing needs.
Once established, the agency would strengthen Alberta’s existing policing model and complement the province’s current police services, which include the RCMP, Indigenous police services and municipal police. It would help fill gaps and ensure law enforcement resources are deployed efficiently across the province.
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