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Taxpayers need plans, not platitudes

September 05, 2017
Taxpayers need plans, not platitudes

This op-ed was published the May issues of Business in Calgary and Business in Edmonton magazines and is available for other outlets to publish, free of charge.

When asked how he’s going to balance the budget, Alberta Finance Minister Joe Ceci speaks in platitudes. His government is “bending the cost curve,” he insists. Over time, the government says they’re slowing the growth of their spending, which will – like magic! – mean the deficit will disappear soon enough.

Currently, the minister says they’ll balance the budget six years from now (conveniently not during the government’s current mandate). But time and again, these promised dates have shifted like prairie winds.

Despite a chorus of journalists pushing Ceci for specifics during the government’s press conference explaining the details of their annual report – an important fiscal update – alas, no details yet. When the minister was asked when a balanced budget plan might materialize, he said that his government is “on track with their deficit” and is “doing a great job.”

As our finance minister knows, the budget isn’t a yoga exercise. We can’t simply “bend” it to achieve balance. At its core, the budget is very basic, as everyone with a household or business balance sheet knows. When you’re bringing in less, you must spend less. That doesn’t mean “slowing the growth” of your spending. You can’t begin a fancy new backyard renovation but simply nix the koi pond. You must spend less than you’re spending today.

The problem is that even as Minister Ceci shifted the blame of the deficit away from his government and onto oil prices, in his next breath he rolled out a laundry list of new spending items. In fact, last year the government found $1 billion in new revenue, and yet the deficit remained unchanged. The government found an extra $1 billion – and spent it. While the minister says his government isn’t “overly reliant” on oil prices to balance the budget, the reality is that his government is almost entirely reliant on oil prices rebounding. In the meantime, the only plan is to cross their fingers and spend, spend, spend.

Of course, the government is also raising taxes. But it’s not quite panning out as they’d hoped. Despite higher general business taxes and income taxes, revenues from both are hundreds of millions of dollars below the government’s budget projections.

The fiscal mess means more bad news from credit rating agencies: in July DBRS downgraded the province’s long-term outlook to negative. In May, when S & P Global Ratings downgraded Alberta’s credit by two notches, they predicted a $94 billion debt by 2020.

It’s a mess. But here’s the good news. When the going gets tough, the tough get going…and they get creative. In Edmonton, the birth of a new provincial political party brings the opportunity for hitting the refresh button on the policy debate, inviting ideas for how government opponents would achieve budget balance, but also pushing government to do the same.

Sometimes all it takes is a little added pressure to achieve some accountability. As David Staples wrote in the Edmonton Journal, the introduction of Fahad Mughal into the mayoral race may not pose any serious challenge to Don Iveson’s candidacy, but Mughal’s proposals for more direct democracy in government decision-making will push Iveson in the right direction. With continued pressure, taxpayers can keep the heat on politicians vying for their votes provincially and at the city level.

If Edmontonians can duck the inevitable political bombast, they can push for some serious answers from their government. Enough with the platitudes. Minister Ceci, show us a plan. 

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