In the run-up to the 2015 election, then-Alberta Premier Jim Prentice was asked by an interviewer about the perilous state of the province’s finances, which had recently taken a nasty negative turn as a result of a precipitous drop in oil prices.
“In terms of who is responsible,” Mr. Prentice said at the time, “we all need to look in the mirror, right. Basically all of us have had the best of everything and have not had to pay for what it costs.”
You could have powered the province for a year on the outrage his remarks generated. Within hours, #PrenticeBlamesAlbertans went viral. NDP Leader Rachel Notley, who would ride to power partially on the anger his comments stirred, called them “insulting” and “disconnected from reality.” As it turns out, the only thing the late Progressive Conservative Party leader was guilty of was speaking the truth.
And in Alberta, there are many people who can’t handle the truth.
The fact is, the province’s fiscal situation isn’t much different today than it was for Mr. Prentice, and Alison Redford before him, and Ed Stelmach before her and Ralph Klein before him. You get the idea. Alberta still relies on the vagaries of the oil industry to pay many of its bills, which is as foolish a strategy now as it was when it first began decades ago.
Actually, you could convincingly make the argument it’s an even worse concept in these times, given the increasingly complex, and unpredictable, nature of a global energy market witnessing a world transitioning away from fossil fuels.
Too many in Alberta want to believe that a new pipeline will fix all that ails the province. That’s a fantasy, one that even the political leaders running to govern the province understand (but won’t admit publicly). A new pipeline would provide a temporary fix, and it would stanch, for a few years, the fiscal bleeding that is taking place. But ultimately, all it would do is allow the government to return to using oil revenues to balance the books, allow a province to live beyond its true means for a few more years.
It’s the kind of short-sighted, insane politics that has landed the province in the trouble it is today.
Back in 2015, when he was asked about Alberta’s financial bottom line, Mr. Prentice said that the province had the most expensive public services in the country but hadn’t built a revenue model to sustain them. That’s because the province doesn’t have a sales tax, among other measures, that are designed to fill a government’s coffers with the funding necessary to underwrite the programs and services it provides.
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In other words, the people of the province had the best of everything while not having to pay for what it costs.
Well, the day is coming when it will no longer be viable for the province’s political leadership to continue kicking its revenue problem down the road. The day is coming when oil money won’t be there to anywhere near the degree it is now. The day is coming when Alberta’s fiscal burden, including a mountain of debt, won’t be something that can be ignored by those who are supposed to be thinking long-term, but in reality only care about where the next vote comes from.
University of Calgary economist Trevor Tombe is predicting a future, just a couple of decades away, that will include provincial annual deficits of $40-billion unless action is taken on the revenue side.
That means a sales tax of some sort. And what that means, of course, is there will be future generations of Albertans that will pay the price for the selfishness of people living there now; people who are reaping the benefits from a non-renewable resource that rightfully belongs to those who haven’t even been born yet. But all they’ll get to enjoy is the problems that an oil addiction left behind for them to solve.
There are too many people in Alberta who are quick to blame the province’s problems on others, namely Ottawa. Everything is someone else’s fault – as if changing the equalization formula would magically make all Alberta’s problems go away. It’s crazy talk.
Albertans have already heard lots of promises on the campaign trail. But what they haven’t received is the kind of honest, straight-up conversation that is needed. There likely won’t be politicians with the nerve to start one until a crisis leaves them with no other option.
Gary Mason