Premier Jason Kenney deserves credit for holding the line on spending, but his budget doesn’t go nearly far enough to address the growing debt problem, and he knows it.
By the end of his first term, Kenney is planning to reduce day-to-day spending by about two per cent by tackling some wildly inefficient departments such as Advanced Education. He’s also taking some air out of the government’s ballooning labour costs which increased by $3 billion during the downturn.
Although this budget isn’t as bad as some in recent memory, Albertans shouldn’t let Kenney off the hook. It’s like being the most sober person in the drunk tank: it’s better than being the drunkest, but it’s nothing to brag to your mom about. And Kenney railed against the New Democrats’ last budget which shares too much resemblance to his 2020 budget.
Following the New Democrats’ last budget in 2018, Kenney rightly blamed the NDP for overspending and eroding Alberta’s finances.
“Since they came to office, spending has increased by 16 per cent,” explained Kenney in his 2018 post-budget opinion piece for the Sun. “Only the NDP could consider this restraint.”
The NDP’s spending hikes followed a decade of runaway spending from the Progressive Conservatives. Between 2004 and 2015, the PCs doubled program spending. And yet, spending is still a problem.
When you account for all areas of the budget, Kenney will increase total spending this year by $471 million above and beyond what the NDP spent in 2018.
Kenney also used to hammer the NDP for its big deficits and deep dive into debt.
“This government clearly doesn’t understand the danger of debt … It’s difficult to get out of a debt trap that they’re dragging us deeper into,” Kenney explained following the 2018 budget.
“We will constructively oppose a fiscal plan that is dragging Alberta into a sea of red ink,” Kenney confirmed.
But Kenney’s deficits in 2019 and 2020 are expected to surpass the NDP’s deficits. In 2018, the NDP ran a $6.7 billion deficit. The deficit is projected to come in at $7.5 billion in 2019 and $6.8 billion this year.
Higher deficits mean more and more debt that’s hanging over the heads of future taxpayers. The NDP added $50 billion in debt. Although Kenney has acknowledged the importance of stopping “the reckless dive into debt,” his government is still saddling Albertans with another $25 billion in debt.
In opposition, Kenney called out the NDP for its tax hikes that made the tough times tougher and for imposing a carbon tax that wasn’t mentioned in the New Democrat election platform.
“The NDP’s policies have made a bad situation worse. The NDP hiked taxes on individuals and businesses,” explained Kenney. “Why would we dig deeper into taxpayers’ pockets when Alberta has the most inefficient provincial government in Canada, with by far the highest per capita program spending … Raising taxes would hurt, not help the effort to grow our economy.”
Kenney’s helping Albertans by fighting carbon taxes and reducing business taxes, but he’s also hiking income taxes and property taxes even after he promised to balance the budget without raising taxes. Kenney’s finance bureaucrats estimate the income tax hike will end up costing Albertans hundreds of millions of dollars, while Kenney is increasing his property tax-take by $102 million this year.
Albertans continue to pay higher income and property taxes and continue to be dragged further into the sea of red ink. After more than a decade of runaway spending and a Blue Ribbon report that showed Alberta has a $10-billion spending problem, making timid reductions around the edges won’t cut it. Kenney needs to cut further and faster.