After three months of listening to Albertans and studying fiscal policies, the Financial Management Commission released its Report on July 8. Of the 25 recommendations to Finance Minister Pat Nelson, ten are excellent, eleven are fine, three are vague, and one is bad.
Excellent recommendations include:
- end "roller coaster" budgeting by providing stable, predictable funding for roads, buildings, bridges and other infrastructure;
- consider alternative funding for capital projects, like private-public partnerships (P3s);
- open up the budget planning process to more public input;
- keep the provincial government out of salary negotiations for teachers and other public sector workers (unless the government itself is a signatory to the collective agreement);
- protect the Heritage Fund from further erosion by inflation.
The only recommendation which should be rejected outright is to spend some of the Heritage Fund on capital projects. Alberta's spending on government programs is 45% higher today than six years ago (compared to 12% population growth and 13% inflation). Last year Alberta spent (per person) more than any other province in Canada. The Alberta government collects (on average) over $3 billion per year from oil and gas royalties, in addition to "regular" revenues from income tax, business taxes, health care premiums, and other taxes. In light of these facts, why dip into the Heritage Fund to pay for projects when we already have ample money from other sources Spending our children's inheritance - even for roads, bridges and buildings - makes no sense.
What you won't find in this Report is a recommendation for taxpayer protection legislation.
Albertans are still at the mercy of politicians, who can break election promises and impose tax increases without having to explain or justify their actions until some far-off election date. Just look at the $722 million in tax increases imposed on us less than four months ago. Someone had to pay for that 45% spending increase, and that someone is you. Without taxpayer protection legislation, the onus is on Albertans to justify to politicians why we should be able to keep our own hard-earned money. But shouldn't the onus be on politicians to justify why they want to take more of our money
Manitoba legislation requires politicians to put tax increases (or new taxes) to voters in a referendum. In Switzerland, a tax increase must be put to a referendum if 50,000 voters sign a petition. Swiss taxpayers have sometimes voted for tax increases - but only after politicians made a convincing case for their necessity.
Premier Klein recently said that the Heritage Fund must be protected by legislation, not just by a "policy" which can be changed on a moment's notice. Ditto for taxpayer protection. A mere "policy" of "no tax increases" can be easily changed - like on March 19, 2002 when the new budget hiked our taxes, contrary to an express election promise.
Implementing 24 of the 25 recommendations in this Report is fine. But Premier Klein's government should pass legislation to protect Alberta taxpayers.