Sunday, June 17, 2018


   Alberta’s auditor general recently produced a report that highlighted risks to Alberta’s long-term fiscal sustainability. The report highlights a number of problems with Alberta’s approach to fiscal policy in recent years, including the province’s rapid spending growth and the closely-related issue of the province’s heavy reliance on natural resource revenue to fund day-to-day spending.
   Let’s start by considering Alberta’s unsustainable approach to public spending.
   Our studies have repeatedly shown that Alberta’s fiscal problems stem from successive governments increasing spending at a significantly faster rate than that would have been necessary to offset cost pressures from inflation and population growth. For many years, when oil prices were high, successive governments spent freely as though the good times would never end. When oil prices fell in late 2014, the government found itself spending at unaffordable levels, facing a very large budget deficit. Since then, the government’s decision to continue to increase spending has caused those deficits to grow even bigger along with the provincial debt.

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