The Fraser Institute recently released their Fiscal Performance Index for 2006. While Alberta continues to rank number one in the country in taxes and debt (or the lack thereof as the case may be), it has slipped from second place last year to eighth place this year when it comes to government spending. This is in no small part due to the exponential increase in government spending.

Alberta government program spending has increased by 113% over the past decade. Alberta is experiencing the same problem it faced when Premier Klein took over the reigns from Don Getty in 1992 - Alberta does not have a revenue problem, it has a spending problem.

This spending problem has only become more serious now that Alberta is debt-free. In 2004-05 program spending increased by 11.9% over 2003-04, and has again increased this fiscal year by an additional 12.4% over 2004-05. In total, government program expenditures have increased by nearly 26% in just two years!

During this same period - and unquestionably just as worrisome is the government's dependency on non-renewable resource revenues. In 2003, the Alberta government budgeted the first $3.5 billion in resource revenues for ongoing core program spending. They bumped that up to $4 billion in 2004, and again up to $4.75 billion in 2005.

Using the first $4.75 billion in resource revenues for ongoing core program spending might seem like small potatoes when you consider the government is projected to rake in $13.2 billion in resource revenues this year. But when you consider the fact that in 1999-2000 the Alberta government only received $4.65 billion from resource revenues, and in 1998-99 only pulled in $2.37 in resource revenues it should leave most Albertans rightfully concerned.

If oil and natural gas prices fall to what they were only six years ago, core services would have to be cut.

This might be of no concern if Alberta controlled the global price of oil and natural gas. But as we have seen over the past few decades, global forces dictate the size of Alberta's wind-fall. A war in Iraq, a Venezuelan oil workers strike, a mild winter or even the sheer whim of an OPEC nation sheik can all send Alberta from massive surpluses to relative poverty.

The question then falls back to what to do with these surplus resource revenues when they occur One-time infrastructure spending tends to be a fairly common answer. The only problem is that there very few true "one-time" infrastructure projects.

Building a school, hospital, senior's facility, or even a road might seem like one-time spending at first glance. But often forgotten is the fact that these so-called "one-time infrastructure projects" automatically create a need for additional ongoing spending.

The government cannot, or at least should not, build a hospital, school, or senior's facility and then not staff the new facility. Same goes for road building - the government should not build a stretch of road without planning on maintaining it on a regular basis. This again creates additional ongoing spending.

The only answer that does not involve putting Alberta in a position where it has to cut jobs, defer infrastructure projects or go back into debt is to restrict spending and reduce Alberta's dependency on the revenues from oil and gas.

Failure to do so will drop us further down the Fraser Institutes' Fiscal Performance Index and leave us wondering how we managed to piss away yet another oil boom.