Shrewd budgeting needed to direct provincial strategy

This past weekend, I was privileged to have the mayor from the Town of Oyen, Paul Christianson, join me

This past weekend, I was privileged to have the mayor from the Town of Oyen, Paul Christianson, join me at Saturday’s Alberta Economic Summit held at Mount Royal University in Calgary. The guest list was comprised of stakeholders from both the public and the private sector, which included economists, academics and public watchdog groups.

The purpose of the summit was to discuss the financial crisis that has descended upon Alberta’s treasury department that will admittedly have no effect on the scheduled March 7 budget release.

The summit was more about the Alberta government explaining that they will maintain current levels of spending rather than implement any cutbacks.

However, any long-term funding promises for health and education are obviously going to be at risk, as long as spending out-paces revenues.

Due to an expected continuation of lower energy revenues for the foreseeable future, the government must come to terms with reality and quit gambling so heavily on volatile commodity prices, which has resulted in five straight budget deficits.

Unfortunately, that point has been missed. Leaked details on the budget indicate that spending in reality will actually rise by 0.6 per cent, or $251 million.

An exact number, in reality, has not been etched in stone, as there are upcoming meetings on further budget decisions.

The Alberta government is warning of an estimated $6 billion shortfall in revenues, which they are now revealing to us, will contribute to a $300-million deficit in the operating budget.

An operating budget deficit is something that this government, in no uncertain terms, assured us they would never do.

Based on spending increases year over year, and a reluctance to curb wasteful spending, the prospect of job losses would seem obvious, considering the largest portion of departmental budgets revolve around compensation packages.

Simply, department funding cuts create situations of forced attrition that has a tendency to be indiscriminate, resulting in unwanted frontline losses.

The Wildrose caucus believes that the place to cut is not on the frontlines of any of our social programs. Instead, we have targeted cuts to eliminate the layers of administration that are currently in place.

With a projected capital-spending budget of about $5 billion, combined with the $36.6 billion on the operating side, accounts for a total spending of $41.6 billion on a budget of somewhere about $35 billion.

Unless we can generate new or improved revenue streams, it’s obvious we need to cut on our spending side to get us back into balance.

If projections of another $6-billion revenue shortfall for next year are accurate, it will be very hard to avoid another deficit well over the $3-billion mark, which could result in further departmental cuts.

These mounting deficits and budget difficulties are guaranteed to continue until the overspending is brought into line with actual revenue numbers — it’s called budgeting.

Rick Strankman is the MLA for Drumheller-Stettler. His email is drumheller.stettler@assembly.ab.ca and his Twitter is @Rick-Strankman.


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