It’s hard to rebuild when you’re broke

As residents of southern Alberta return home after this past week’s devastating floods, the disaster’s effect on the province’s political and economic fortunes is starting to become clear. There’s no question that government has a role to play in helping residents recover from such events, and we certainly applaud the government’s clear determination to meet this terrible challenge head on. Such assurances from the provincial government are no doubt a great comfort from homeowners and business operators facing an uncertain future in the aftermath of this terrible ordeal.

As this crisis passes, however, Premier Alison Redford will need to turn her attention back to the state of the province as a whole. If previous decisions by Ed Stelmach and Ms. Redford eroded the Alberta Advantage, last week’s floods may have washed it away entirely.

“We are going to do whatever it takes, in terms of paying

If Alberta had spent wisely in good times, it wouldn’t need to borrow to pay for flood relief

to rebuild — to rebuild homes, to rebuild families and communities,” said Ms. Redford. “I don’t want to scare people, but I want you to know that when we talk about what’s going to happen, we’re talking about a 10-year plan.”

How could it possibly take a decade to restore the province to its previous state? Eight years after Hurricane Katrina decimated New Orleans, the city is one of the fastest growing in the United States. America’s Eastern Seaboard was devastated by Hurricane Sandy less than a year ago, but many communities have already managed to rebuild.

There’s no way the government will allow infrastructure that is vital to the economy — such as the TransCanada Highway, the Stampede grounds, as well as roads and bridges into Calgary’s downtown core — to languish for so long. Many private residences, especially in places such as High River, will take longer to rebuild — but not 10 years longer. It has been less than a week and most Calgary residents have already been let back into their homes, power has been restored to a majority of the city and crews have made great headway on repairing roads and public transit infrastructure.

So far, Ms. Redford has pledged $1-billion in provincial support. But initial estimates of the damage range from $3- to $5-billion, and the Premier has vowed to pay the full uninsured cost of reconstruction. Most insurance programs do not cover overland flooding — water that comes into a house through doors and windows — and the provincial government has lifted the cap of $100,000 for individual houses that it had during the 2005 flood.

By pledging to do “whatever it takes,” Ms. Redford has put her government on the line for a considerable amount of money that it does not have. Much of the flood relief is expected to come from the Sustainability Fund, which once contained $17-billion, but was expected to drop under $700-million by next spring, even before disaster struck.

Had the government not let its spending get out of control, it would have had enough money in its rainy day fund for an actual rainy day like this one. The Alberta Tories did away with a Klein-era law preventing deficit spending a long time ago, and have now run six consecutive deficit budgets. All the while, the government has had a plan to balance the budget that is just over the horizon.

More recently, the province announced it would go back into debt to finance over $15-billion worth of infrastructure projects. As a result of the floods, the province’s infrastructure deficit increased significantly literally overnight. Ms. Redford now has the political cover she’s wanted to finance big-government programs through debt and deficits for years to come.

It is the primary duty of a government to see to the physical safety and security of its population and the protection of publicly owned property. Canadians are blessed to live in a remarkably safe country, but no place on Earth is immune from natural disasters. Whatever damage the government cannot prevent through good planning — not encouraging building in flood-prone areas, for example — it can at least mitigate by keeping the economy strong enough, and reserve funds sufficiently flush, to respond to the unexpected when it occurs. Alberta’s Progressive Conservatives have failed in that duty, and the province as a whole will pay the price for years to come.