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Alberta

Focus on tangible policies—not political finger-pointing— to reduce fire risks

Published

4 months ago

4 minute read

From the Fraser Institute

By Kenneth P. Green

Was the very specific area around Jasper—not the entire forested lands of Alberta—managed aggressively enough?

With the picturesque town of Jasper badly damaged by fire, Albertans and Canadians across the country are wondering how such destruction was allowed to happen.

Much of the public debate assumes that the disaster, in some way, was human-caused or aggravated by governmental negligence or incompetence. Some argue that government policies to suppress natural wildfires, which were widely implemented across North America after the Second World War, allowed the build-up of massive amounts of fuel for potential mega-blazes. Others argue that governments have been negligent by failing to allow aggressive logging of dead trees and by using insufficient controlled burns to manage fuel loads of underbrush. Some, of course, blame climate change—specifically human-caused climate change. And yes, the climate has changed, warming about 1.2 degrees Celsius since 1850, which may contribute to a heightened risk of forest fires (although there’s no ability to attribute any single climatic event to climate change).

But focusing on these issues misses the forest for the trees and raises philosophical questions about humanity’s relationship with nature, specifically, whether or not it’s desirable—much less feasible—for humanity to think we can control nature at large scales and turn the world into a giant tame botanical garden. Further, focusing on these questions of “too much” or “too little” intervention mostly serves political interests trying to beat each other over the head about climate policies, which are at best capable of only slightly—very slightly—affecting the risk of future forest fires.

Rather, having studied environmental, health and safety policy for several decades, I believe we should focus on very different specific questions about how the fire was allowed to ravage Jasper. These questions cut through the foggier questions of how we manage nature and instead focus on how we manage human risks.

So, was the very specific area around Jasper—not the entire forested lands of Alberta—managed aggressively enough? In 2018, 350 hectares of trees around Jasper were removed. Apparently, that was not enough to protect the human-built environment. Parks Canada will have to answer that question in time.

Did the provincial and federal governments fall short in maintaining sufficient fire-fighting capabilities to protect Jasper? According to some reports, this was a significant source of failure, where the federal government, which maintains no ability to fight fires at night, failed to coordinate with Alberta’s provincial government, which does have night-fighting capabilities.

Did the town of Jasper take enough precautions to protect itself from the risk of conflagration? Are building codes in Jasper sufficiently stringent at fire-proofing human structures? Is the fuel burden within the township itself sufficiently controlled? More broadly, how much are we willing to spend to reduce risks? And how far should we aim to reduce those risks?

The answers to these questions could help produce tangible policies that may help reduce the risk of fire damage in the future.

There’s a lot of finger-pointing right now. Political point-scoring is the order of the day, particularly in the realm of climate policies. But using the Jasper fire for political ends distracts from the important questions about whether or not anybody or any level of government should try to tame nature outside of human-built environments. And about what policies will work best to protect towns like Jasper.

Author:

Kenneth P. Green
Senior Fellow, Fraser Institute
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Alberta

Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn

Published on November 21, 2024

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From the Fraser Institute

By Tegan Hill

According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.

The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.

For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).

And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.

In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.

This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.

Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.

Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.

Of course, if the government falls back into deficit there are implications for everyday Albertans.

When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.

According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.

Author:

Tegan Hill
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Alberta

Premier Smith says Auto Insurance reforms may still result in a publicly owned system

Published on November 21, 2024

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Better, faster, more affordable auto insurance

Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.

After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.

Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.

“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”

Danielle Smith, Premier

“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”

Nate Horner, President of Treasury Board and Minister of Finance

Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.

Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.

Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.

In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.

Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.

By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.

“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”

Nathan Neudorf, Minister of Affordability and Utilities

Quick facts

  • Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
  • A 2023 report by MNP shows
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