| Posted: Wednesday, Feb 06, 2013 06:00 am
“Please God, let there be another oil boom. I promise not to piss it all away next time.” I’m sure we all remember that 1980s bumper sticker, but guess what – we’ve done it again. When we will ever learn?
The Heritage Savings Trust Fund was set up by the late premier Peter Lougheed, partly (and only a small part) as a rainy day fund. More importantly, as a result of the 2002 Financial Management Commission, the Sustainability Fund was set up to offset the inevitable bust cycles that the provincial treasury suffers periodically. And yes, the Sustainability Fund has performed well in offsetting budget deficits for the last few years but now it is likely to be drained by the end of the next fiscal year barring an unlikely turnaround.
So what did we do wrong? Very clearly we failed to shift our operational dependence on resource revenues and even continued to rely on the Heritage Fund revenues to supplement our operational budgeting.
One of the encouraging aspects of Premier Alison Redford’s recent “bitumen bubble” speech was to start directing a portion of our resource revenue into the Heritage Fund. Hurrah! Hurrah! Hurrah! At long last after 25 years we will attempt to resurrect the initial purpose of the Heritage Fund to provide a legacy for our children and grandchildren. Let’s hope that, when Alberta’s resource revenues crash for good, future generations will not face the dilemma we are now faced with today. Let’s hope we are now only faced with a temporary fiscal dilemma.
But how will we find the money to stash away in our Heritage Fund when we are faced with a $6 billion shortfall in our revenues? Certainly the first step is to examine our spending priorities. The “results based” budgeting proposal will certainly generate serious discussion within the bureaucracy and any decisions to cut programs reducing Albertans’ high expectations will get the lobby groups chattering. But that’s good – the government needs all of the feedback it can muster.
The answer is not in holding another economic summit. Lord knows we’ve had enough of them, with the Premier’s Council for Economic Strategy in 2011, conversations with business and taxpayers both before and after the last election as well as the leadership debates. The answer is listening and implementing the many thoughtful, considered and sincere recommendations that have been made, most of which are consistent with holding the line on spending and not relying on resource revenues for operational expenditures.
And let’s face it, as Albertans – government employees and others – we need to recognize that we have a serious problem and we all need to pull together to reform our system for a better future for ourselves, our children and our grandchildren.
Let’s do it right this time and stick to our guns. We can’t afford to piss it away again.
Ken Allred is a former alderman and MLA for St. Albert.