From the Fraser Institute

By Tegan Hill and Austin Thompson

In Alberta, municipal government spending is on the rise—and not just because of higher prices or a growing population. Indeed, most of Alberta’s largest municipal governments have increased spending in recent years (even after adjusting for inflation and population growth). That means higher taxes for many Albertans. But depending on where you live, you might be paying much more than your neighbours.

From 2009 to 2023 (the latest year of available data), per-person spending across Alberta’s largest municipalities increased by 12.9 per cent (on average), climbing from $3,001 to $3,389 (inflation-adjusted).

Some governments have increased spending more sharply than others. For example, during that same 15-year period, local governments in Canmore, Grande Prairie County and Strathcona County all increased their per-person spending by more than 20 per cent to reach more than $4,000 per person. And Lethbridge, the province’s fourth-most populous city, increased per-person spending by 18.6 per cent to reach $4,423. (Again, all numbers adjusted for inflation.)

But not all municipalities share this approach to spending. Alberta’s two largest cities, Calgary (2.1 per cent) and Edmonton (4.8 per cent) saw relatively modest spending increases from 2009 to 2023. As a result, their 2023 per-person spending levels ($3,144 and $3,241, respectively) were around the middle of the pack.

Airdrie, Chestermere and Cochrane—all fast-growing communities near Calgary—each spent under $2,200 per person in 2023. And all three reduced their per-person spending. (after adjusting for inflation).

Of course, no two municipalities are exactly alike. They all make different policy choices about which services to fund and how to fund them. But the sheer size of these differences across Alberta—and the overall upward trend in spending—should grab the attention of Albertans.

Local governments have an enormous impact on the day-to-day lives of Albertans. They build local water infrastructure, maintain local roads, manage local parks and set municipal property tax rates. And yet, their budgets often receive far less public scrutiny than their provincial or federal counterparts.

Moreover, when municipal spending grows faster than population and inflation, year after year, it raises important questions about value, sustainability, and accountability. Albertans in high-spending municipalities are right to ask: has additional spending translated into better services? Or are costs rising without clear public benefit?

Municipalities need resources to function well—but they also should use those resources wisely. Albertans should pay attention to what their local government representatives spend—and how spending levels compare across the province—to help assess whether they’re getting good value for their tax dollars.

Tegan Hill

Director, Alberta Policy, Fraser Institute

Austin Thompson

Senior Policy Analyst, Fraser Institute

From the Fraser Institute

By Alex Whalen and Jake Fuss

Post-deregulation Australia’s dairy industry increased exports by $3 billion. Exports now account for more than 30 per cent of Australia’s total dairy production (and 20 per cent in New Zealand, which also ended its supply management system) compared to less than one per cent in Canada.

In one of the latest salvos in his trade war, President Trump recently took aim at supply management in Canada—a set of regulations that restricts  supply and controls imports to allow Canadian dairy producers of milk, eggs and poultry to maintain higher prices for their products than would otherwise exist in a competitive market.

In his attacks on Canada, Trump gets a lot wrong. But in fact, if Ottawa and the provinces dismantled our supply management system in a fair and productive way, it would be a rare win-win in trade negotiations with the Trump administration. And a win-win for both Canadian consumers and Canadian farmers.

For lessons in reform, Canada can look to other countries. For example, Australia’s dairy industry was heavily regulated for most of the 20th century, but by the 1990s, the weight of higher prices for supply-managed goods created public pressure for reform. The country also faced pressure from its trading partners to stop shielding its domestic dairy industry on grounds of fairness, much like the U.S. pressure Canada faces today.

So, around the turn of the century, the Australian government gradually dismantled its supply management system. Immediately following deregulation, milk prices fell by 12 cents per litre in Australia. Since then, prices have remained relatively flat, with price increases below the rate of inflation.

In other words, when the Australian dairy industry transitioned from a tightly-regulated protected industry to a more open industry with competition from both domestic and international firms, consumers reaped the rewards.

Of course, opponents of reform in Canada (including the dairy lobby) claim that supply management is necessary to help Canadian farmers survive and thrive. But in fact, after the Australian government eliminated supply management, the farming industry was arguably stronger. Some farmers exited the industry (and were compensated for doing so), and those that remained were more productive and more competitive in export markets.

In fact, post-deregulation Australia’s dairy industry increased exports by $3 billion. Exports now account for more than 30 per cent of Australia’s total dairy production (and 20 per cent in New Zealand, which also ended its supply management system) compared to less than one per cent in Canada. Despite Canada’s larger economy and population, both Australia and New Zealand export more dairy products than Canada.

At the same time, the Australian government introduced programs to financially support farmers to either help them adjust their operations or exit the industry. Farmers who remained in the industry experienced a 56 per cent increase in revenues and a substantial increase in the value of exports.

Moreover, according to a study from 2011, government subsidies for farmers equalled six per cent of total farm receipts in Australia and one per cent in New Zealand compared to 18 per cent in Canada. Which means that, due largely to Canada’s supply management system, the burden on taxpayers in Canada is far heavier than in those two countries.

Here in Canada, reform requires cooperation between the federal and provincial governments. Currently, Ottawa controls the trade component of supply management through restrictive import tariffs, while the provinces work alongside the federal government to regulate milk marketing boards, which set minimum prices for consumers.

In the face of President Trump’s aggressive trade actions, the premiers should agree to work with the Carney government to finally eliminate Canada’s arcane supply management system. It won’t be easy—politicians are slow to challenge entrenched interests and constituencies. But as the experience of our other allies clearly shows, governments can reform the dairy industry to the benefit of both consumers and farmers. There could be a silver lining to Trump’s attack on supply management in Canada.

Alex Whalen

Director, Atlantic Canada Prosperity, Fraser Institute

Jake Fuss

Director, Fiscal Studies, Fraser Institute