Provincial budget can be balanced without raising taxes: report
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Provincial budget can be balanced without raising taxes: report

Alberta Finance Minister Joe Ceci, left, exchanges glances with Alberta Premier Rachel Notley, right, as he delivers the 2015 provincial budget in Edmonton on Tuesday, Oct. 27, 2015. THE CANADIAN PRESS/Topher Seguin
Summary

According to the report, the Alberta government needs to take action to reduce spending and control the deficit

The report is part of a larger book that studies a plan for the province to grow and prosper

CALGARY (660 NEWS) – Two of the most heard of words in the lead up to the 2019 Alberta Election could be ‘balanced budget.’

According to the Canadian Taxpayers Federation, the province’s debt exceeded $52 billion, with the latest fiscal outlook projecting a deficit of $6.9 billion this year.

READ MOREAlberta on track for $6.9 billion deficit

Political parties are already lining up how they would fix the ballooning debt, but some policy analysts say there’s only one solution.

A new report from The Fraser Institute says Alberta can balance the books by reducing spending by at least 11 per cent while rejecting excessive tax hikes.

Ben Eisen with the Institute’s Alberta Prosperity Initiative, says they researched governments of the past and how they dealt with getting out of the red.

“The ones that have failed have generally been ones that took a long period of time, very slow approaches to deficit reduction and trying to fill the hole with tax increases rather than spending restraints. What we’ve seen in the examples that have been successful, is for governments to move quickly, to take action to reduce spending and to create the room for tax reform to help the economy grow.”

Eisen pointed to the federal Liberal governments of the 1990s as an example of balancing budgets by being fiscally responsible.

Alberta was able to balance the budget while Ralph Klein was premier by keeping taxes moderate but it came at the expense of cutting public service jobs.

The Alberta NDP has accused the UCP of reverting back to these cuts if the opposition is elected to form government.

The Fraser Institute report didn’t look specifically at whether cuts to health care and education are needed to balance the budget, instead, they looked at some underlying issues.

“We’ve recently published research showing the substantial wage premium in the government sector compared to the private sector when you compare similarly skilled, educated and experienced employees. That might be a place where, over time, you can have slower wage growth that can help close that gap and can help get towards balance without necessarily hurting front line services in the way people worry about.”

This study is part of a new book titled ‘Alberta Prosperity: A Plan for Opportunity and Growth’, which you can find on the Fraser Institute website.

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