Politicians are fanned out across Alberta this summer, watching barrel racing and kissing babies.
Between pancakes and barbecues, Finance Minister Nate Horner is dealing with some serious horse trading as he plans his budget. The province may be in surplus, but many Albertans are barely scraping by, largely because of inflation and tax hikes inflicted by Ottawa.
The Alberta government can’t force the federal government to stop running massive deficits and jacking up carbon taxes. But it can end wasteful provincial spending, lower our taxes and pay down the debt to strengthen our resistance against Ottawa’s bungling.
The affordability problem is real. Thanks largely to inflation and the federal carbon tax, food costs are way up. A family of four now pays an extra $1,000 for their groceries in 2023 than they did last year. A record number of Albertans are relying on food banks, many of them working families.
People are facing similar challenges in affording homes and fuel. Home prices have doubled since 2015, interest rates are the highest since 2001 and the federal carbon tax now costs Alberta families $710 per year, even after the rebate is factored in.
The good news is Alberta’s budget books are looking good. The province currently has an $11.6-billion surplus, the debt is going down and we pay the lowest fuel taxes in Canada.
That puts Premier Danielle Smith’s government in a good position to meet its election commitment to lower income taxes, which will make life more affordable for folks across the province.
Making sure Alberta stays affordable also means keeping the budget balanced and reducing the debt.
The debt currently sits at about $80 billion, with taxpayers paying about $2.4 billion each year in interest payments.
That’s a lot of money going out the door to pay interest. That kind of money could otherwise be spent building two new hospitals. Or it could cover the provincial income tax bills of 186,000 Albertans — the populations of Red Deer, Brooks and Medicine Hat combined.
Fortunately, the debt is going down and the government has passed a law requiring at least half of the province’s cash surpluses be used to reduce the debt.
But the Alberta government must go further by reducing wasteful spending.
It shouldn’t be blowing $330 million on the new arena project in Calgary or wasting $2 million thinking about hosting the expensive Commonwealth Games.
The pressure to spend more is going to ramp up in the fall as bureaucrats in the finance department write up the provincial budget, with special interest groups and government unions demanding more money.
With Alberta Health Services’ current agreement set to run out next March, Horner needs to resist the urge to spend.
Too many previous governments have given in to that temptation.
Between 2004 and 2015, under former premiers Ed Stelmach, Alison Redford and Jim Prentice, the Alberta government doubled program spending.
Those premiers justified their spending spree by pointing to high natural resource revenues.
But eventually, the music stops, the resource revenue dips and those newly inflated bills still need to be paid. That’s what happened last time and it caused great hardship for Albertans.
History shows why politicians getting their ears bent at summer rodeo parties must remember to keep their fiscal belts tight as they round up the next budget.
Kris Sims is the Alberta director for the Canadian Taxpayers Federation.