May 11th, 2021

Laying it Out: We need a future before we can saddle it with debt

By Scott Schmidt on November 7, 2020.

Honestly, if Premier Jason Kenney’s government was delivering to Albertans a single benefit promised in the two-year lead-up to the 2019 election and the 18 months since, I could almost wrap my brain around an acceptance of widespread austerity.

After all, this is conservative heartland. If there’s one place where budget cuts and fewer services will sell despite decades of evidence across the globe that they hurt the long-term collective, it’s Alberta.

Sure, we were going to endure stinging cuts, but the result would be a booming economy, big-money jobs for all and a balanced budget that proved the NDP were no better than a spoiled college student with daddy’s credit card. Even as Rachel Notley’s government had just surpassed $50 billion in debt, a not-yet-elected Kenney was going on and on about a collision course with $100 billion and that we desperately needed him to stop the bleeding.

Even as his government’s first budget — about five months before COVID changed our lives — took an NDP deficit from $6.7 billion to $8.7 billion, we were told by economist Trevor Tombe it was a “credible path to a balanced budget.” Even as job numbers fell 58,000 between the introduction of the Job Creation Tax Cut and the start of the pandemic, we were told this new ultra-competitive strategy would drown us in investment.

And even as we watched the UCP buy a useless war room, eleventy panels and a gaggle of six-figure issues managers, we were constantly told Albertans would need to face the fact the province is “broke.”

A year and at least $24 billion in new debt later, there are two ways to look at our current situation. On one hand, we are more broke than ever and if we thought service and job cuts were necessary before, we ain’t seen nothin’ yet. This is obviously the position of the UCP, which will cite the ballooning deficit as it hacks away.

But, on the other hand, if we were so broke before COVID hit, how is it we were able to find $24 billion when it did? Don’t forget, we earmarked several billion toward a pipeline that might never get finished (less likely than ever at the moment) and we did so after implementing lockdown measures for a global pandemic that the UCP knew would gut revenues even more than their corporate tax cut already had. Never mind that in one of the most damning auditor general reports ever, these guys are getting cranked this week for losing $1.7 billion due to “blunders and oversight” issues.

You don’t get to be this terrible with finances and then claim a massive deficit is solely the fault of an unexpected emergency, or a low oil price.

We have the money for a pipeline that might be a pipe dream, but we don’t have money to index AISH with inflation so people with disabilities can eat three times a day. You can fill the room with gobbledygook meant to fog that lens, but the bottom, inarguable line is Alberta has the ability to spend money if it needs to.

Even Kenney has changed his tune (not that he has a choice). It wasn’t long ago that he and his team were saying $100 billion in debt would destroy the province. A couple weeks ago at the UCP’s online AGM, he told supporters it is now important to keep our debt-to-GDP ratio under 25%.

Before COVID hit, that ratio was 9.9% — by far the lowest for a jurisdiction in the country, and among the lowest in North America. Granted, with 2020’s deficit and the simultaneous retraction of GDP, that ratio could near 18% by fiscal year end (still low), but it goes to show you that even the premier knows Alberta has room if needed.

If you want to have a doomy attitude about Alberta’s future, there are myriad reasons to be concerned without worrying about all the “debt-servicing costs we’ll be saddling our future generations” with. Look around — second waves, energy woes, economic uncertainty, the world’s most powerful nation mired in a fight between a forgetful old man and a petulant child — it’s not exactly a time of global stability, and Alberta has more adapting to do than most.

How much we spend is far less important than what we spend it on. With or without massive cuts to our social safety net — you know, that thing that made Alberta worth all that pride you feel — we are going to run sizable deficits for several years to come. Kenney has been part of one balanced budget in his entire career and it was pieced together ahead of a 2015 federal election that his party lost, so it’s not like he isn’t used to this.

The premier is going to spend the money. His government, which was elected on fiscal responsibility (or at least, due to Notley’s apparent lack thereof), is probably going to double Alberta’s debt in its first two years. We thought we were trading services and jobs for a balanced budget, and we clearly thought wrong.

If we’re going to live in a province with deficits, debt and a government that can’t manage either, maybe we could at least agree to live in one that throws the money in the right direction.

Scott Schmidt is the layout editor for the Medicine Hat News. Contact him by email at

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