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Globe Editorial

Spendthrift Alberta; fiscally conservative B.C.? Add to ...

Two centre-right governments in two neighbouring provinces have offered the Canadian public an arresting contrast this month, in two quite different budgetary styles.

In British Columbia, Premier Christy Clark and Kevin Falcon, the Minister of Finance – large-L Liberals – introduced a sensible, fiscally conservative budget, while in Alberta, Premier Alison Redford and Ron Liepert, the Finance Minister – Progressive Conservatives – introduced a decidedly expansionary one.

Neither of these governments is far away from the next provincial election – Alberta not later than the end of this May – and B.C. in May, 2013. Both are encountering significant challenges on their right flanks – the Wildrose Party in Alberta and the formerly marginal Conservatives in B.C.

Mr. Falcon has acknowledged some influence from the Drummond report in Ontario, which advocated strenuous spending restraint in that province, though the report was issued on Feb. 15, only six days before the B.C. budget was presented – surely not enough time to change the broad outlines.

In any case, there is a distinct family resemblance. Both the Falcon budget and the Drummond report propose to give a certain degree of preference to health-care and education, with moderate spending growth in both fields, as opposed to severe restraint or actual reductions in other areas – while protecting the very poor by not cutting social assistance payments. This approach is probably a good expression of the priorities and the principles of the public.

The Liepert budget, on the other hand, projects annual economic growth of 3.8 per cent this year, and revenue growth of $11-billion over three years without any tax increases, while drawing upon Alberta’s Sustainability Fund. Health-care spending is to rise 7.9 per cent – very different from B.C.’s 3 per cent and the Drummond report’s 2.5 per cent.

The Redford government demonstrates little memory of the sometimes sharp cyclical downturns suffered by commodity-dependent economies, of which Alberta has bitter experience. Mr. Liepert has acknowledged that the province is over-reliant on oil and gas, but his budget shows little consciousness of the long-term future.

The contrast between the two budgets speaks well of the fiscally conservative B.C. Liberals, while the Alberta Conservatives are looking like spendthrifts.

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