Fraser Institute blasts big-spending Alberta

CALGARY • While Alberta and Texas both enjoyed 10-year economic booms thanks to high oil prices, the province’s “undisciplined” budgets during those years left it in a worse financial position than the state when crude tanked.

In a study titled One Energy Boom, Two Approaches, the Fraser Institute compared the budgets and spending patterns of governments in Alberta and Texas between 2004 and 2014. The think-tank concluded Texas was prudent during that period of higher oil prices while faster government spending growth in Alberta contributed to the province’s currently dire fiscal situation.

The collapse in oil prices beginning in the summer of 2014 has hurt Alberta’s government revenues, which are heavily dependent on energy royalties.

Alberta will borrow $7 billion for operating expenses this year — to keep the lights on at government facilities — and is on pace to run up more than $30 billion in debt by the end of 2019. The province held net assets of $30 billion at the end of 2009.

Despite the oil-price rout, Fraser Institute director of prosperity studies Ben Eisen, who co-authored the report, said the study shows Alberta has a spending problem rather than just a revenue problem.

“The deficits and debt are a function of policy choices, they’re not an inevitable result of the fall in energy prices — although that certainly didn’t help,” Eisen said. “The spending increases (in Alberta) were faster than the rate of inflation plus population, faster than the rate of economic growth,