Alberta begins its slow road to economic recovery, but that recovery can’t be attributed to our provincial government.
Although there were positive signs in the third quarter fiscal update presented by the Notley government on Wednesday, there are also negative signs, which give insight into the real impact caused by the NDP.
Revenues are up and the deficit is down – that’s good news. But there’s a lot of bad news too. Personal and corporate income tax revenues are less than expected, government spending is up and new data from Statistics Canada showed investment levels are expected to decline for the fourth year in a row. It just goes to show that high taxes hurt individuals, businesses and discourage investment.
The province has benefited by a slight resurgence in the price of oil. Outside of the energy sector, which is largely driven by global markets, investment is poor. Changes to labour standards, rising minimum wage and new costs associated with the carbon tax are making things tough for businesses.
While the deficit is down, that’s due in part to a $500 million ‘risk adjustment’ built in to the last budget that wasn’t used. It’s good that it wasn’t needed but it’s not real savings.
Alberta’s debt is set to hit almost $42 billion – thanks to the NDP tacking on more than $9 billion from this year alone – which will be a heavy burden for future generations and current taxpayers who have to foot the bill for debt servicing costs. The province is wasting more than $1.3 billion on interest costs this year, money that certainly could’ve been better spent on infrastructure, education or health care. Yet we continue to sink deeper in debt.
Part of Wednesday’s update focused on the province’s pipeline bottleneck, which is taking a toll on Alberta’s economy. Pipelines are at capacity and we’re unable to get enough of our product to market. The Notley crew is hoping for a miracle in that sector – through pipeline construction or oil price increases – to boost the provincial economy in time for the next election.
The unfortunate news for Notley is that Albertans are smart enough to realize that three years of overspending without results will not be overshadowed by a lucky break. As much as the economy has been recovering and the province is adding jobs, things are not as rosy as they might look on a government spreadsheet. The lagging corporate and income tax revenue is evidence of this.
Will the NDP ever present a plan to get Alberta back to balance? It’s not likely. For those who have observed this government since it took power, there was little substance in the past week’s economic update. Notley’s government continues to overspend, continues to add debt and continues to stand behind its policies that harm businesses. Recovery in the provincial economy doesn’t stem from the government, it stems from the businesses who pay taxes and employ people. Regardless of what happens with the energy sector, voters won’t be fooled again.