MLA Report: Provincial budget fails the middle class

By DREW BARNES on March 10, 2023.

With this year’s pre-election budget, the UCP provincial government has missed a key opportunity to put Albertans first.

With sky-high projected revenues, this government had a once-in-a-generation opportunity to reset Alberta’s economy in favour of the little guy. But, once again, the UCP prioritized shortsighted spending increases and corporate handouts over working families and small business owners.

After spending much of the past two years gathering feedback from families across our region and much of the province, I can tell you the pressures they are facing are real and they are immense. From the rising cost of groceries, to fuel, heat and electricity costs, folks are getting to the end of each and every month with less and less in their pockets. If ever there was a time for broad based tax relief, it’s now. That’s why, ahead of the budget, I was encouraging the government to come to the table with a substantial increase to the basic personal exemption, to give every working family in our province an income tax cut.

In addition, I was seeking the complete removal of the small business tax. It is not in our long-term interest to continue allowing major global corporations with access to lobbyists to use their influence to stack the deck against small- and medium-sized businesses. To succeed in the long term, we should be evening the playing field and encouraging free market competition.

Sadly, the government chose to continue its same tax-and-spend economic agenda that has been failing average Albertans for years. This is a mistake. If we are going to preserve the middle class, we need to focus on making it viable for the little guy to get ahead. We need to get back to the fiscally conservative Alberta Advantage policies that reward hard work, and make Alberta the place to come for those seeking new hope and new opportunity.

At the end of the day, we need to start putting Albertans first and that’s where this budget and this government’s wider economic agenda fails all of us.

Little Orphan Annie promises

Every Albertan with a family budget knows you can’t spend more than you earn for years on end. As we have repeatedly seen over the years, governments often promise to get back to proper fiscal management, but rarely deliver. Call it the Little Orphan Annie effect. When will government get its spending under control? “Tomorrow, tomorrow.”

In this year’s edition of Little Orphan Annie promises, the government promises to bring back the balanced budget legislation that was scrapped by the former PC government. In addition, they promise future operational spending will be tied to Alberta’s population and inflation rates.

So when will it happen? Sing it with me: “Tomorrow, tomorrow.”

How reliable are these promises? Consider this: When the NDP controlled the purse strings, conservatives like me warned the public about out of control spending and debt servicing costs. At its high point, the Notley NDP budgeted about $55 billion in spending and $1.9 in debt servicing. At the time, we called that irresponsible. However, today, the UCP is budgeting $66.8 billion in spending and $2.8 billion in debt servicing. When it comes to fiscal management, the UCP talked the talk, but didn’t walk the walk.

You can’t take hope to the bank

Another trick that both NDP and UCP governments routinely play is over estimating future revenue to justify today’s spending.

This year’s budget projects $70.7 billion in revenue in 2023-24 based largely on high world oil prices that are driven in part by the war in Ukraine. What these predictions don’t account for is the fact that pipeline capacity continues to mean lower prices for Alberta’s oil. The oil price differential in December was $29. This budget predicts an average differential of $19.50 this year. Why the sudden improvement? Are we expecting a new pipeline to come on stream? Sadly, no. The federal government continues to play games with the Trans Mountain project, which won’t come online until very late in 2023, if ever, and basically every other pipeline project to tidewater has been mothballed.

So why would the oil price differential shrink? Because we hope it will shrink?

You can’t take hope to the bank.

Drew Barnes is the Independent MLA for Cypress-Medicine Hat

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