MLA Report: Servicing Alberta’s ballooning debt jeopardizing our province’s priorities
By Medicine Hat News Opinon on October 19, 2018.
Alberta has long been the economic leader in Canada. Alberta boasts 11.6 per cent of Canada’s population, but our province contributes a whopping 17 per cent of the total national Real GDP. This was only possible because past Alberta leadership created an environment that attracted investment and created jobs. However over the past three years, that changed, and the NDP government elected in 2015 has accelerated its managed decline of Alberta’s economy. Between 2014 and 2016 Alberta’s Real GDP nose-dived, dropping more than seven per cent per Albertan. The NDP government’s unrestrained borrowing has ballooned Alberta’s debt to nearly $55 billion this year, headed towards $96 billion by 2023. That is a whopping 668 per cent increase in debt since the NDP took office. We all know debt comes with a cost. Debt servicing costs almost total $2 billion annually, headed towards $3 billion by 2021. Alberta’s monthly interest payments will total nearly $250 million by 2021! In an effort to begin the conversation around how Alberta can get back to balance, increase investment, and create jobs I travelled the province, and held public town hall meetings where I was able to speak with hundreds of people including industry stakeholders, members of the public, municipal leaders, business owners, and non-profits and what I heard was very interesting. The Albertans I spoke with over the course of my four-day tour were acutely aware of the province’s growing debt. One Albertan noted that debt servicing costs are not discretionary; the province is obligated to pay them and by 2021 they will be nearly $3 billion annually. That is more than most ministries’ annual operating budgets! Sadly, today’s $120 million a month interest expense is jeopardizing Albertan’s priorities. The stakeholders expressed a strong resistance to increasing taxation, and many noted that since the NDP raised personal and corporate taxes in 2015 they have actually brought in less revenue. Instead stakeholders overwhelmingly favoured the UCP caucus’s proposal to conduct a thorough review of government regulations with an eye towards meaningful reductions of red tape, and a focus on free enterprise. When it came to Alberta’s economy, stakeholders felt the problem was a lack of interest in investing in Alberta since the NDP took office. One stakeholder in particular, who owns an oil and gas company in Lloydminster, said he’s all but given up on Alberta; he’s now focused entirely on expanding his Saskatchewan operations. He said, “I’m not the only one. Getting approvals in Saskatchewan usually takes about two weeks; in Alberta it takes two years and the costs are prohibitive. The Alberta government is creating new jobs, they just aren’t being created here.” That is a hard pill to swallow, since according to the OPEC, world demand for oil will increase to 109 million barrels per day by 2030. If Alberta fails to address its continued anti-competitiveness we will be losing out on billions of dollars of economic activity. The carbon tax was a topic of near constant complaint. Many of the seniors who attended the town halls are on a fixed income and having their heating and gasoline costs increase is a burden. Albertans consistently declared it is wrong to tax a necessity. Travel to work, food transportation, and winter home heating clearly are necessities. The carbon tax is defined by our party as all economic pain with no environmental gain, and has been a financial hardship that has failed to produce the ideological social licence. One of the most alarming stories I heard was from the owner and operator of a trucking company who attended the Red Deer town hall. His pre-carbon tax fuel costs were $17,000 per month. Following the most recent increase his monthly fuel costs have increased to more than $30,000 per month. That is an annual increase of more than $156,000! That is money he’s had to find through cost cutting and staff layoffs. I know that Alberta can and will return to be the Canadian economic leader it once was if the government first and foremost takes the time to listen to Albertans. If this government won’t do that, then in spring 2019 Albertans have the opportunity to elect one that will. Drew Barnes is the MLA (UCP) for the Cypress-Medicine Hat constituency. 13-12
