Alberta
Albertans continue to pay for government debt—despite budget surpluses
From the Fraser Institute
By Tegan Hill
” due to the amount of debt accumulated, and higher interest rates, Albertans will actually see government debt interest costs increase and reach $687 per Albertan by 2025/26 “
Thanks in large part to a windfall in resource revenue, the Alberta government has been running budget surpluses since 2021/22. Yet at the same time, as budget season approaches, Albertans are paying more and more for the cost of government debt.
Prior to the recent string of surpluses, during a period of relatively low resource revenue, Alberta incurred nearly uninterrupted deficits from 2008/09 to 2020/21. A deficit is simply when the government spends more than it collects in revenue in a given year—and it leads to debt accumulation.
Indeed, Alberta went from a net financial asset position of $35.0 billion in 2007/08 to a net debt position of $59.5 billion in 2020/21. In other words, the province’s finances deteriorated by nearly $95 billion.
Of course, the burden of government debt ultimately falls on Alberta families, today and in the future, because governments must pay interest on their debt—and that interest ultimately is raised from Albertans through taxes. As the government accumulated more and more debt, debt interest costs increased from $61 per Albertan in 2007/08 to a projected $672 per Albertan in 2023/24. Servicing the debt also diverts resources away from services such as health care and education.
Unfortunately, debt interest costs don’t just disappear when you run surpluses, even with the Alberta government using a share of these surpluses to pay down debt. Instead, due to the amount of debt accumulated, and higher interest rates, Albertans will actually see government debt interest costs increase and reach $687 per Albertan by 2025/26.
This is why it’s so important for governments to practice fiscal prudence, in good times and bad. Rather than increasing spending during the good times (i.e. periods of relatively high resource revenue) as successive Alberta governments have done in the past, then running deficits when relatively high resource revenue inevitably declines, the Smith government should restrain spending.
How? For starters, the government can limit the amount of resource revenue included in the budget using a rainy-day account based on the previous Alberta Sustainability Fund (ASF), which was established in 2003 to “stabilize” a specific amount of resource revenue for the budget, thus limiting the amount of money available for annual spending. The idea was simple; save some resource revenue during good times to ensure a stable amount of resource revenue for the budget during bad times.
Unfortunately, the previous ASF was based in statutory law, which meant its rules were easily changed and the government discarded the fund entirely in 2013. The Smith government should instead establish the specific amount of resource revenue for the budget as a “constitutional rule,” which would make it more difficult to change in the future.
Government debt comes with big costs for Albertans—and those costs don’t simply disappear when the province runs a surplus. For true fiscal stability, the government needs a fundamentally new approach. The upcoming budget is a good place to start.
Author:
Alberta
Alberta health care blockbuster: Province eliminating AHS Health Zones in favour of local decision-making!
Hospital Based Leadership: Eliminating the bureaucratic vortex in hospitals
Since Alberta’s government announced plans to refocus the health care system in November 2023, a consistent message has emerged from patients, front-line health care workers and concerned Albertans alike about the flaws of the prior system. Alberta Health Services’ current zone-based leadership structure is overly complex and bureaucratic. It lacks the flexibility and responsiveness needed to effectively support facilities and staff – particularly when it comes to hiring, securing supplies and adopting necessary technologies.
That’s why Alberta’s government is changing to a hospital-based leadership structure. On-site leadership teams will be responsible for hiring staff, managing resources and solving problems to effectively serve their patients and communities. Hospitals will now have the flexibility to respond, freedom to adapt and authority to act, so they can meet the needs of their facilities, patients and workforce in real time.
“What works in Calgary or Edmonton isn’t always what works in Camrose or Peace River. That’s why we’re cutting through bureaucracy and putting real decision-making power back in the hands of local hospital leaders, so they can act fast, hire who they need and deliver better care for their communities.”
“Hospital-based leadership ensures decisions on hiring, supplies and services are made efficiently by those closest to care – strengthening acute care, supporting staff and helping patients get the timely, high-quality care they need and deserve.”
“By rethinking how decisions are made, we’re working to improve health care through a more balanced and practical approach. By removing delays and empowering our on-site leaders, we’re giving facilities the tools to respond to real-time needs and ultimately provide better care to Albertans.”
AHS’ health zones will be eliminated, and acute care sites will be integrated into the seven regional corridors. These sites will operate under a new leadership model that emphasizes site-level performance management. Clear expectations will be set by Acute Care Alberta, and site operations will be managed by AHS through a hospital-based management framework. All acute care sites will be required to report to Acute Care Alberta based on these defined performance standards.
“Standing up Acute Care Alberta has allowed AHS to shift its focus to hospital-based services. This change will enable the local leadership teams at those hospitals to make site-based decisions in real and tangible ways that are best for their patients, families and staff. Acute Care Alberta will provide oversight and monitor site-level performance, and I’m confident overall hospital performance will improve when hospital leadership and staff have more authority to do what they know is best.”
“AHS is focused on reducing wait times and improving care for patients. By shifting to hospital-based leadership, we’re empowering hospital leaders to make real-time decisions based on what’s happening on the ground and respond to patient needs as they arise. It also means leaders can address issues we know have been frustrating, like hiring staff where they’re needed most and advancing hospital operations. This change enables front-line teams to act on ideas they see every day to improve care.”
The Ministry of Hospital and Surgical Health Services, Acute Care Alberta and Alberta Health Services will work collaboratively to design and establish the new leadership and management model with an interim model to be established by November 2025, followed by full implementation by summer 2026.
Quick facts
- Countries like the Netherlands and Norway, and parts of Australia have already made the shift to hospital-based leadership.
- The interim hospital-based leadership model will be implemented at one site before being implemented provincewide.
- Hospital-based leadership, once implemented, will apply only to AHS acute care facilities. Other acute care organizations will not be affected at the time of implementation.
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Alberta
Alberta is investing up to $50 million into new technologies to help reduce oil sands mine water
Technology transforming tailings ponds
Alberta’s oil sands produce some of the most responsible energy in the world and have drastically reduced the amount of fresh water used per barrel. Yet, for decades, operators have been forced to store most of the water they use on site, leading to billions of litres now contained largely in tailings ponds.
Alberta is investing $50 million from the industry-funded TIER system to help develop new and improved technologies that make cleaning up oil sands mine water safer and more effective. Led by Emissions Reduction Alberta, the new Tailings Technology Challenge will help speed up work to safely reclaim the water in oil sands tailing ponds and eventually return the land for use by future generations.
“Alberta’s government is taking action by funding technologies that make treating oil sands water faster, effective and affordable. We look forward to seeing the innovative solutions that come out of this funding challenge, and once again demonstrate Alberta’s global reputation for sustainable energy development and environmental stewardship.”
“Tailings and mine water management remain among the most significant challenges facing Alberta’s energy sector. Through this challenge, we’re demonstrating our commitment to funding solutions that make water treatment and tailings remediation more affordable, scalable and effective.”
As in other mines, the oil sands processing creates leftover water called tailings that need to be properly managed. Recently, Alberta’s Oil Sands Mine Water Steering Committee brought together industry, academics and Indigenous leaders to identify the best path forward to safely address mine water and reclaim land.
This new funding competition will support both new and improved technologies to help oil sands companies minimize freshwater use, promote responsible ways to manage mine water and reclaim mine sites. Using technology for better on-site treatment will help improve safety, reduce future clean up costs and environmental risks, and speed up the process of safely addressing mine water and restoring sites so they are ready for future use.
“Innovation has always played an instrumental role in the oil sands and continues to be an area of focus. Oil sands companies are collaborating and investing to advance environmental technologies, including many focused on mine water and tailings management. We’re excited to see this initiative, as announced today, seeking to explore technology development in an area that’s important to all Albertans.”
Quick facts
- All mines produce tailings. In the oil sands, tailings describe a mixture of water, sand, clay and residual bitumen that are the byproduct of the oil extraction process.
- From 2013 to 2023, oil sands mine operations reduced the amount of fresh water used per barrel by 28 per cent. Recycled water use increased by 51 per cent over that same period.
- The Tailings Technology Challenge is open to oil sands operators and technology providers until Sept. 24.
- The Tailings Technology Challenge will invest in scale-up, pilot, demonstration and first-of-kind commercial technologies and solutions to reduce and manage fluid tailings and the treatment of oil sands mine water.
- Eligible technologies include both engineered and natural solutions that treat tailings to improve water quality and mine process water.
- Successful applicants can receive up to $15 million per project, with a minimum funding request of $1 million.
- Oil sands operators are responsible for site management and reclamation, while ongoing research continues to inform and refine best practices to support effective policy and regulatory outcomes.
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