OPINION | Road to recovery outlined in Alberta budget could be long, winding and full of potholes

It is a budget with a song in its heart and a chip on its shoulder.

A budget that is part Pollyanna and part Chicken Little.

A budget that predicts such a bright future for Alberta, the document should have been issued with sunglasses. And a budget that is so combative with the federal government it should have come with brass knuckles.

It is arguably also one of the most political budgets in provincial history.

Fiscally, the budget is no shocker. Say hello to the new budget, much like the old budget.

It is a continuation of the United Conservative government’s initial budget introduced last October with revenues of $50 billion and almost $57 billion in expenses. It doesn’t overtly cut spending on health and education, two areas that account for 60 per cent of the total budget.

Of course, when it comes to health and education, a freeze is as good as a cut when you factor in inflation plus cost of living, as teachers, school boards, nurses, public sector unions and doctors will tell you.

And then there’s the deficit and debt.

Finance Minister Travis Toews says the government is on track to wipe out the deficit in two years but the deficit this year will be a whopping $6.8 billion. And it must be galling for the UCP to admit that, after lambasting the old NDP for projecting a $100-billion debt, the UCP government itself will have an $88-billion debt in two years.

Finance Minister Travis Toews talked to the media about the upcoming provincial budget in his office at the Alberta legislature on Wednesday. (Jason Franson/The Canadian Press )

Call it hubris, call it karma, call it the reality of being a government in a province that has gone through a recession caused by a collapse in oil prices. The NDP didn’t create the recession and the UCP can’t cure it. Just look at the budget.

Optimistic growth

We are living through the slowest recovery from a recession in decades. The province recovered from the economic downturns of 1982, 1986 and 2009 in roughly two years. This slump, that started in 2014, won’t be over until later this year.

The budget ruefully talks about the economy stagnating in 2019 but says the economy is “forecast to grow at a solid pace of 2.5 per cent in 2020 as oil production rebounds and business investment finally turns a corner.”

That growth is based on some optimistic projections. The government, for example, is forecasting employment growth to hit 2.1 per cent in 2021 even though the highest projection from banks and national forecasting agencies is 1.6 per cent.

“There are signs that in 2020 we will turn a corner and see real economic growth return to the Alberta economy,” declared Toews who is banking on growth from higher oil prices, more oil to market and an economy kick started by the continuing cuts to corporate taxes.”

Fair deal

However, if we don’t turn that corner and are still trapped on Recession Alley, the government is happy to continue blaming the federal government.

The budget takes a swipe at Ottawa, explaining how “significant barriers are being placed in the way of Alberta’s economic recovery.”

In fact, there’s a whole chapter devoted to complaining about the federal government entitled, “A Fair Deal for Alberta.”

Yes, that “fair deal.” The one that is the focus of a government-sponsored panel touring the province asking people if Alberta should establish its own police force, collect its own income taxes and withdraw from the Canada Pension Plan.

Alberta Lt.-Gov. Lois Mitchell, centre, delivered the government’s throne speech Tuesday at the legislature. (Alberta Legislature)

The budget’s fair deal chapter reads like a history lesson as taught by a grumpy United Conservative professor. It complains about the federal stabilization program, pointing out how the province is demanding a further $2.4 billion from Ottawa and that a failure to get the money “constitutes a serious failure of Canadian fiscal federalism.”

And it happily takes swipes at Ottawa over the federal equalization program, federal legislation, the lack of pipelines. At times it sounds like it was ripped from one of Kenney’s tub-thumping campaign speeches with a threat that if “substantial progress is not made on construction of a coastal pipeline, and if Bill C-69 is not released or substantially amended, the government remains committed to hold a referendum by October 21 on removing equalization from the Constitution Act.”

In Tuesday’s Speech from the Throne, the Kenney government declared it was “obsessed with job creation.”

This budget picks up that theme and runs with it. But this promises to be more a marathon than a sprint. And there is no guarantee the government will ever reach a finish line.

Kenney’s election focus on jobs, the economy and pipelines has so far not led to more jobs or a stronger economy.

Toews may have predicted the economy will turn a corner this year but he also pointed to “volatility” in the world economy and suggested darkly that if things don’t turn around, he will have to look at more cuts.

This is a budget that looks to the future with optimism tempered by a dollop of dread.


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