From the Fraser Institute

By Tegan Hill

According to the Smith government’s recent fiscal update, the government’s $2.9 billion projected budget surplus has increased to a $4.6 budget surplus in 2024/25 mainly due to higher-than-expected resource revenue. But the resource boom that fuels Alberta’s fiscal fortunes could end at any moment and pile more government debt on the backs of Albertans.

Resource revenue, fuelled by commodity prices (including oil and gas), is inherently volatile. 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 accounted for just 6.5 per cent of total government revenue. In contrast, according to the Smith government’s fiscal update, projected resource revenue is $20.3 billion this fiscal year and will account for more than a quarter (26.1 per cent) of total government revenue.

But here’s the problem.

Successive Alberta governments—including the Smith government—have included nearly all resource revenue in the budget. In times of relatively high resource revenue, such as we’re currently experiencing, the government typically enjoys surpluses and, flush with cash, increases spending. But when resource revenues decline, the province’s finances turn to deficits.

The last time this happened Alberta ran nearly uninterrupted deficits from 2008/09 to 2020/21 while the province’s net financial position deteriorated by nearly $95 billion. As a result, Albertans went from paying $58 per person on annual provincial government debt interest costs to nearly $600 per person.

So how can the Smith government avoid the same fate as past Alberta governments who wallowed in red ink when the boom-and-bust cycle inevitably turned to bust?

The answer is simple—save during good times to help avoid deficits during bad times. The provincial government should determine a stable amount of resource revenue to be included in the budget annually and deposit any resource revenue above that amount automatically in a rainy-day account to be withdrawn in years when resource revenue falls below that stable amount.

This wouldn’t be Alberta’s first rainy-day account. In fact, the Alberta Sustainability Fund (ASF), established in 2003, was intended to operate this way. A major problem with the ASF, however, was that it was based in statutory law, which meant the Alberta government could unilaterally change the rules governing the fund. Consequently, the stable amount was routinely increased and by 2007 nearly all resource revenue was used for annual spending. The ASF was eventually drained and eliminated entirely in 2013. This time, the government should make the fund’s rules constitutional, which would help ensure it’s sustained over time.

Put simply, funds in a resurrected ASF will provide stability in the future by mitigating the impact of cyclical declines on the budget over the long term.

In the recent fiscal update, the Alberta government continues to risk relying on relatively high resource revenue to balance the budget. To avoid deficits and truly stabilize provincial finances for the future, the Smith government should reintroduce a rainy-day account.

From LifeSiteNews

By Anthony Murdoch

Canadian Taxpayers Federation director Franco Terrazzano cited the ‘crazy research’ citizens are forced to subsidize under Justin Trudeau’s Liberal government as justification for a department to ‘slash Ottawa’s wasteful, bloated bureaucracy.’

One of Canada’s most respected taxpayer watchdogs said the government needs an agency similar to U.S. President-elect Donald Trump’s forthcoming Department of Government Efficiency (DOGE) to “slash Ottawa’s wasteful, bloated bureaucracy” that under Prime Minister Justin Trudeau has funded numerous woke projects.

“This (DOGE) is the blueprint. … All we need now is a prime minister with the guts to pick up the scissors,” Canadian Taxpayers Federation (CTF) federal director Franco Terrazzano wrote in a recent blog.

Terrazzano highlighted what he called the “crazy research Canadian taxpayers are forced to subsidize” thanks to Trudeau’s Liberal government.

Examples of such “crazy” government spending include the government granting a university student $20,000 to study “Gender Politics in Peruvian Rock Music.”

Canadian taxpayers were also on the hook for $105,000 for “Cart-ography: tracking the birth, life and death of an urban grocery cart, from work product to work tool,” as well as $17,500 for “My Paw in Yours: Dead Pets and Transcendence of Species Divides in Experimental Art-Making Practice.”

Incredibly, the Trudeau government also doled out $50,000 in a scholarship award to a student to study “Playing for Pleasure: The Affective Experience of Sexual and Erotic Video Games.”

DOGE will be headed by Elon Musk and businessman and former Republican presidential candidate Vivek Ramaswamy.

“Together, these two wonderful Americans will pave the way for my Administration to dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal agencies — Essential to the ‘Save America’ Movement,” Trump announced on Truth Social.

Terrazzano noted how a Canadian version of DOGE would be welcome in Canada, and “Those marching orders sure would sound good in a prime minister’s mandate letter to a finance minister.”

He noted how the blueprint a future potential Conservative prime minister should follow should include ending corporate welfare as well as slashing Canada’s state-run broadcaster the CBC, which takes “more than $1 billion from taxpayers annually.”

He also noted how the government has wasted billions a “multibillion dollar gun confiscation that police officers say won’t work, the $25 billion equalization scheme and taxpayer-funded media bailouts, among others.”

“The bad news for taxpayers is we pay too much tax because the government wastes too much money. The list of wasteful spending in this article is far from exhaustive,” he wrote.

“The good news is a champion of taxpayers could make massive cuts and barely anyone outside the Ottawa bubble would notice.”