Time to put Al­berta gov­ern­ment on a diet

Prairie Post (East Edition) - - OPINION - BY FRANCO TERRAZZANO

After years of overindulging, the Al­berta gov­ern­ment needs to in­clude a diet plan in its New Year’s res­o­lu­tions.

The provin­cial gov­ern­ment has been en­joy­ing the gravy train for quite some time, hav­ing dou­bled its pro­gram ex­penses be­tween 2004 and 2015.

Un­like many Al­ber­tans who were forced to tighten their belts in re­cent years, the cur­rent gov­ern­ment con­tin­ued the spend­ing spree. In­stead of pump­ing the breaks and giv­ing tax­pay­ers much-needed re­lief, the gov­ern­ment in­creased its op­er­at­ing spend­ing be­yond in­fla­tion and pop­u­la­tion growth every year since 2015.

Even with half a mil­lion fewer peo­ple than Bri­tish Columbia, the Al­berta gov­ern­ment’s 2018 bud­get spend­ing is bil­lions of dol­lars larger. Al­berta now has a deficit that’s over $7 bil­lion, a debt bill grow­ing by $1 mil­lion every hour along with new and higher taxes.

The Al­berta gov­ern­ment could have guarded against this fis­cal mess with a sim­ple strat­egy, as Fraser In­sti­tute’s Steve Lafleur and Ben Eisen re­cently out­lined.

“If the gov­ern­ment had taken a dif­fer­ent course—sim­ply hold­ing nom­i­nal spend­ing at 2015/16 lev­els—Al­berta would have likely bal­anced the bud­get this year,” wrote Lafleur and Eisen.

But there’s room to go fur­ther. Far from the boogey­man ar­gu­ment that the sky would fall if spend­ing is cut, the Al­berta gov­ern­ment still has fat in need of trim­ming.

The first place to start is with the bal­loon­ing bu­reau­cracy. At $27 bil­lion, com­pen­sa­tion for gov­ern­ment em­ploy­ees makes up over half of the op­er­at­ing bud­get. Em­ploy­ees (all lev­els of gov­ern­ment) in Al­berta earn a 10 per cent wage premium com­pared to coun­ter­parts in busi­ness.

Gov­ern­ment em­ploy­ees are also much more likely to be cov­ered by a reg­is­tered pen­sion plan, re­tire ear­lier, lose more work hours for per­sonal time and are less likely to ex­pe­ri­ence job loss than those work­ing for a busi­ness.

Al­berta’s gov­ern­ment em­ploy­ees are over­paid com­pared to those in other prov­inces. In fact, Al­berta tax­pay­ers could have saved $2 bil­lion in 2016 if salar­ies were in line with the av­er­age of Canada’s three largest prov­inces.

But em­ployee com­pen­sa­tion is only half the story. Ac­cord­ing to an­other Fraser In­sti­tute re­port, to­tal gov­ern­ment jobs in the prov­ince ex­ploded up­wards be­tween 2014 and 2018, while the num­ber of jobs out­side gov­ern­ment de­clined.

Al­berta’s health-care sys­tem also needs re­form.

“Al­berta spends $3.8 bil­lion more than the av­er­age [per per­son spend­ing] of On­tario, Bri­tish Columbia and Que­bec on health care,” ac­cord­ing to pub­lic pol­icy ex­perts Jan­ice MacKin­non and Jack Mintz. But with Al­berta’s rel­a­tively young pop­u­la­tion and ab­sence of chronic dis­eases its “health-care costs should be lower, not higher, than prov­inces like Bri­tish Columbia.”

Ac­cord­ing to a Con­fer­ence Board of Canada study, Al­berta’s health out­comes lag be­hind B.C., On­tario and Que­bec, even though the prov­ince spends hun­dreds of dol­lars more per per­son. In 2016, Al­ber­tans also en­dured longer wait times for treat­ment than the na­tional av­er­age. All of this adds up to an un­ac­cept­able con­clu­sion.

“Prov­inces like On­tario and Bri­tish Columbia spend less on health care, even though their pop­u­la­tions are older and less healthy, but they have bet­ter out­comes,” wrote MacKin­non and Mintz.

It’s clear the Al­berta gov­ern­ment hasn’t turned down tax-dol­lar dessert in quite some time. But it’s never too late for the gov­ern­ment to change its glute­nous ways. With the new year now upon us, it’s the per­fect time for the Al­berta gov­ern­ment to com­mit to a diet, hop on the tread­mill and trim some fat.

Franco Terrazzano is the Al­berta Di­rec­tor with the Cana­dian Tax­pay­ers Fed­er­a­tion.

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