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Alberta

Alberta government must reform spending to avoid deficits

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4 minute read

From the Fraser Institute

By Tegan Hill

According to Premier Danielle Smith, the Alberta government is creating a new committee—composed of the premier, Finance Minister Nate Horner, Technology and Innovation Minister Nate Glubish, three treasury board members, and three private members—to review government spending in the province. Smith says the committee will find savings so her government can deliver on the promised personal income tax cut. But in fact, the need for a thorough program review is much broader than that.

A bit of background.

During the election campaign, Smith promised to create a new 8 per cent tax bracket for personal income below $60,000, which is expected to cost provincial coffers $1.4 billion annually. While the Smith government’s 2024 budget delayed this tax cut, the premier recently said a “substantial” cut is coming soon.

According to Smith, the committee will review “every single program in every single department to see if there are ways that we can remove wasteful spending, move spending from low-priority areas to high-priority areas, find ways that we can use technology to be able to deliver services better, and accelerate that personal income tax cut.”

Again, the idea of a program-by-program review is a good one. But the goal must span beyond finding savings for a single personal income tax cut. Alberta has a big spending problem and it must be meaningfully addressed.

Simply put, Alberta governments have a bad habit of increasing spending during the good times of high resource revenue and budget surpluses, like the province is currently experiencing, but fail to rein in spending when resource revenues fall. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.

To be clear, the Smith government introduced a rule to limit increases in operating spending (e.g. spending on annual items such as government employee compensation) to the rate of population growth and inflation. But while this a step in the right direction, the government’s earlier spending increases since 2022 mean it continues to rely on relatively high—but very volatile—resource revenue to balance its budget.

Indeed, according to this year’s provincial budget, program spending this year will reach $14,334 per Albertan, which is $1,603 more per person (inflation-adjusted) than the government originally planned to spend in the 2022 mid-year budget update, Smith’s first fiscal plan as premier.

In total, the Alberta government will spend a projected $6,037 more per Albertan (inflation-adjusted) over four years from 2023/24 to 2026/27 than it planned in the 2022 mid-year budget update.

In other words, the government’s current plan to restrain spending by the rate of inflation and population growth is starting from a higher base level of spending. As a result, Alberta remains at risk of incurring a budget deficit when relatively high resource revenue declines.

For perspective, if resource revenue fell to its average over the last 10 years—rather than being at historic highs—the government’s $367 million projected surplus for this year would immediately fall to a deficit of $7.4 billion, even before the billion-dollar tax cut that Smith says is coming soon.

The Alberta government should use its program review to more closely align ongoing spending with stable ongoing levels of government revenue rather than onetime windfalls. Otherwise, Alberta will continue on its boom-and-bust rollercoaster that inevitably leads back to deficits and more debt.

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Alberta

Alberta calling for federal election! Premier Smith demands feds scrap dangerous oil and gas production caps

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Premier Danielle Smith, Minister of Environment and Protected Areas Rebecca Schulz and Minister of Energy and Minerals Brian Jean issued the following statement on the proposed federal oil and gas production cap:

“This production cap will hurt families, hurt businesses and hurt Canada’s economy. We will defend our province, our country and our Constitutional rights.

“Make no mistake, this cap violates Canada’s constitution. Section 92A clearly gives provinces exclusive jurisdiction over non-renewable natural resource development yet this cap will require a one million barrel a day production cut by 2030.

“The evidence is overwhelming. Three reports from reputable firms have shown that these regulations will sucker-punch Canada’s economy, a million barrels cut every day according to S&P Global, $28 billion a year in lost GDP according to Deloitte, and up to 150,000 lost jobs according to the Conference Board of Canada.

“The losses to GDP mean billions a year will disappear from the economy. Billions that won’t be going towards new schools, hospitals and roads, all for a reckless ideological scheme that will not reduce global emissions.

“Ultimately, this cap will lead Alberta and our country into economic and societal decline. The average Canadian family would be left with up to $419 less for groceries, mortgage payments and utilities every month. Canadian parents and workers will suffer while Justin Trudeau outsources the duty to provide safe, affordable, reliable and responsibly produced oil and gas to dictators and less clean producers around the world. We could be the solution. Instead, Ottawa would rather sacrifice our ability to lead.

“Tweaks won’t work. This cap must be scrapped. Alberta’s government is actively exploring the use of every legal option, including a constitutional challenge and the use of the Alberta Sovereignty within a United Canada Act. We will not stand idly by while the federal government sacrifices our prosperity, our constitution and our quality of life for its extreme agenda.”

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Alberta

Business owners receive court approval to proceed with COVID lawsuit against Alberta gov’t

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From LifeSiteNews

By Anthony Murdoch

A judge ruled that businesses impacted by COVID lockdowns are allowed to claim compensation for harm and losses incurred due to the provincial chief medical officer’s illegal orders.

A class-action lawsuit on behalf of dozens of Canadian business owners in Alberta who faced massive losses or permanent closures due to COVID mandates has been given the go-ahead to proceed by a judge.

Lawyers representing businesses from Alberta-based Rath & Company announced in a press release on October 30 that it was “successful in its application for certification on behalf of Alberta business owners impacted by Covid-19 restrictions and closures imposed through Chief Medical Officer of Health (“CMOH”) Orders.”

“Justice Feasby of the Court of King’s Bench of Alberta released his decision today certifying the class action in Ingram v Alberta, 2024 ABKB 631,” Rath & Company said.

Lead counsel Jeffrey Rath said the Alberta government has been placed on notice for its actions against businesses during the COVID lockdown era.

The Rath lawsuit proposal names Rebecca Ingram, a gym owner, and Chris Scott, a restaurant owner, as “representative plaintiffs who suffered significant financial harm due to (former Alberta Chief Medical Officer) Dr. (Deena) Hinshaw’s Public Health Orders.”

According to Rath, the class action seeks to certify that “affected Alberta business owners who suffered losses due to the CMOH orders, which were found to be ultra vires — outside legal authority and therefore unlawful — under Alberta’s Public Health Act (“PHA”).

“As a result, the Court Certified multiple claims, including negligence, bad faith and misfeasance in public office. The Court allowed affected businesses to claim compensation for harm and losses incurred due to the illegal CMOH Orders including punitive damages,” Rath said.

Any business operator in Alberta from 2020 to 2022 who was negatively impacted by COVID orders is now eligible to join the lawsuit. Any payout from the lawsuit would come from the taxpayers.

The government’s legal team claimed that the COVID orders were put in place on a good faith initiative and that it was Alberta Health Services, not the government, that oversaw enforcement of the rules.

As a result of the court ruling, Alberta Crown Prosecutions Service (ACPS) said Albertans facing COVID-related charges will not be convicted but instead have their charges stayed.

Thus far, Dr. Michal Princ, pizzeria owner Jesse JohnsonScott, and Alberta pastors James Coates,  Tim Stephens, and Artur Pawlowski, who were jailed for keeping churches open under then-Premier Jason Kenney, have had COVID charges against them dropped due to the court ruling.

Under Kenney, thousands of businesses, notably restaurants and small shops, were negatively impacted by severe COVID restrictions, mostly in 2020-21, that forced them to close for a time. Many never reopened. At the same time, as in the rest of Canada, big box stores were allowed to operate unimpeded.

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