Irresponsible tax and royalty cuts have blown a hole in Alberta's revenue base
Some politicians want Albertans to believe that these are tough times. They want us to believe that the recession has left no choice but to trim budgets and cut funding, even for vital services like education.
But ordinary Albertans know in their hearts and their guts that there is something seriously wrong with this picture.
They see mega projects ramping up, they see glitzy office towers rising, they see the economy springing back to life - and they wonder: Why?
Why, amidst such plenty, should we be laying off teachers and other education workers?
Why should we be under-funding our universities, colleges and technical schools?
Why should we be cutting services for the needy and the disabled?
The truth is: There is no good reason.
Facts are sometimes inconvenient for politicians. They get in the way of the stories they tell voters and tell themselves. But when we’re talking about our schools and our hospitals, about services for our kids, our grandparents and the most vulnerable members of our society – then we can’t afford to ignore the facts.
What do the facts tell us?
They tell us that Alberta is one of the most prosperous jurisdictions not only in Canada, but in the entire world.
They tell us that we have no public debt and that we have billions tucked away for rainy days in the Sustainability Fund.
They tell us that, on a per-person basis, our provincial economy is 75 per cent larger than the Canadian average; that corporate profits in the province have increased by more than 400 per cent over the past decade; and that tens of billions of dollars in investment continue to pour into the oil sands each year.
These are NOT tough times.
We are a province that can think big and dream big. We are certainly a province that can afford to provide adequate, stable long-term funding for core services including education.
There is another part of the government story that doesn’t stand up to scrutiny. That’s the part where they say we have a spending problem – that costs are out of control for public services.
Once again, the facts tell a different story.
The truth is that Alberta’s per-person spending on public services is bang on the national average.
The truth is that overall spending on public services has barely kept up with our province’s robust population growth.
The truth is that, as a share of our province's overall economic pie, spending on public services has actually gone down over the last 20 years – and not by just a little bit.
All of this begs the question: If we can afford our services (which, clearly, we can) and if spending is under control (which, clearly, it is) why then is the Stelmach government still recording deficits?
This is the real question that Albertans need to be asking themselves and their politicians, especially during the Tory leadership race and in the run-up to the next election.
The answer is clear. The reason our cupboard is bare is because our provincial government has decided to make it bare.
Successive governments here in Alberta have deliberately stopped collecting a reasonable and responsible share of our province’s economic pie to fund the public services that Albertans need. Years and years of ill- conceived tax and royalty cuts have left us with an inadequate and unreliable revenue base.
Alberta is like a rich guy with a big hole in his pocket. He keeps shoving the money in, but his pockets are always empty at the end of the month. The answer is not for the rich guy to sell his house, or tell his kids they’re going to live on Kraft Dinner. The answer is to fix the hole.
The good news is that thoughtful members of our provincial community are starting to wake up and speak out.
Former premier Peter Lougheed understands the problem and is calling for revenue reform. So are members of the premier’s own advisory panel on economic strategy and academics from think tanks including the Parkland Institute and the Canada West Foundation.
Politicians don’t like to talk about taxes. And our current crop of leaders has been successfully bullied by the oil industry away from any talk about fair royalties.
But for the sake of our kids, our communities and our future, this is a discussion we have to have.
We need to demand that our politicians stop preaching austerity when it is clearly unwarranted.
And we need to call on leaders to deal with the real problem which is Alberta’s broken system for revenue generation.
By Gil McGowan
President, Alberta Federation of Labour
Co-chair, Join Together Alberta