The Alberta government is overcharging taxpayers $10 billion every year
Alberta taxpayers have been duped into overpaying by $10 billion more for government services every year. Even worse, that incredible sum of money isn’t delivering better services for Albertans.
The Blue Ribbon Panel, a team of financial experts led by former Saskatchewan New Democratic finance minister, Janice MacKinnon, recently released a damning report on the province’s budget woes. There’s a clear takeaway for taxpayers: the Alberta government is overcharging us by $10 billion every year.
“The panel found that Alberta’s spending per capita is the highest in Canada and has consistently been higher than the average of the 10 provinces over the last 25 years,” states the report.
Albertans spend $2,451 per person more than the average of British Columbia, Ontario and Quebec for provincial government services. That means the Alberta government’s annual expenses would be $10 billion less if spending levels were on par with the average of these three comparable provinces – and it means there would be no deficit.
The overcharging isn’t justifiable given the quality of services Alberta taxpayers receive.
“In some key areas, in spite of the higher levels of funding, the results achieved are no better and, in some cases, worse than in other provinces,” stated the panel.
Take health care. Alberta is the youngest province and we each spend $1,000 more per person than people living in Ontario, but we don’t get the best health-care delivery.
“[Alberta’s health-care] outcomes are no better and are often worse than comparable provinces … Albertans wait an average of 26 weeks [from referral by a general practitioner until they receive treatment], more than 10 weeks longer than in Ontario which has the shortest wait times," noted the panel.
The government’s budget problems are bad now, but things will get much worse if this runaway spending train isn’t stopped. Every Albertan could owe over $20,000 in provincial government debt by 2022.
Then there’s the interest charges needed to service that debt.
In 2022, taxpayers could be paying $3.7 billion in debt interest payments – a far cry from the $600 million a decade earlier. This would cost every Albertan about $800 per year in 2022, or a family of four nearly $3,200. Families can’t afford to lose out on thousands of dollars every year to the bond fund managers on Bay Street.
The more money Alberta sends to the big banks in Toronto or New York to service the debt, the less money we have to spend on services that actually matter. The panel noted that the billions of dollars in debt interest payments in 2022 could pay for more than 30,000 teachers or 35,000 long-term care beds.
It’s clear that squeezing more tax dollars out of cash-strapped Albertans isn’t the way to get the province’s fiscal house in order.
“Raising taxes to find more money for the current level of programs and services is not the answer,” stated the panel. “If a family was paying more than their neighbours for having their car serviced and getting worse results, it would not simply find more money to pay the higher costs. Instead, it would find out what others were doing to get better results at a lower cost.”
The government needs to work tirelessly until it fixes this spending problem. It’s not rocket science. If B.C., Ontario and Quebec can figure out a way to provide quality services for significantly less money, why can’t Alberta?
This column was originally published in the Calgary Sun on September 7, 2019.