Alberta Finance Minister Joe Ceci is trying to do his best Dr. Seuss impersonation, hoping Albertans will swallow his unappetizing menu of debt and learn to like it like green eggs and ham. “We will get to balance. Once we get to balance and run surpluses, we will pay down the debt. And once we pay down the debt, happy days will be here again.”
Sounds easy, but how can we take Minister Ceci at his word when he hasn’t told us how he plans to get it done? He says the province will have its books balanced by 2023-24. By then the debt could easily top $100 billion and annual debt servicing costs will exceed $5 billion. Add the repayment of principle, it will be decades before we find happiness.
Here’s a quick, and ugly, look at the tale of the tape:
Current budget deficit of $10.8 billion
$47 barrel of oil
Current debt servicing costs of $1 billion per year. With interest rates expected to rise to ‘normal’ levels beginning as early as next week, debt servicing costs could exceed $3 billion annually by the end of this government’s term
Projected debt of $71.3 billion by 2019-2020
These numbers are alarming for two reasons: the government has no plan to decrease spending, and, the government’s largest source of revenue by far – income taxes for individuals and corporations – are declining in spite of the NDP’s tax rate increases from its first budget.
A staggering $8.7 billion was borrowed this year for day-to-day government operations (mostly wages) on top of $4.7 billion for building schools, roads and hospitals. Premier Rachel Notley and company continue to espouse their policies are family-friendly. What about tomorrow’s families? What will the future look like for them?
As the deficit continues to climb, and the debt servicing payments increase because of swelling debt, something has to give. Either Albertans will be asked to pay more in taxes, or government programs and/or services will have to be cut so Alberta can service the debt. Given the NDP’s aversion to cutting, we can all expect to pay more, which is not good for Alberta families.
We’ve seen this movie before. Past PC governments needed to get re-elected, and when times were good, they succumbed to the public sector’s demands for more money. Consequently, today Alberta has the highest paid teachers, doctors and nurses among all provinces.
The reason Albertans find themselves in this pickle, again, is because no politician since Ed Stelmach was willing to hold spending to population growth plus inflation. That’s all it would have required to avoid the problem in the first place. It’s dĂ©jÄ‚Â vu all over again reminiscent of the Don Getty years, which begat us Ralph Klein and some very tough decisions. Former premier Jim Prentice was right; Albertans do need to look in the mirror. The current premier and her finance minister should be the first Albertans to take a look.
