Provincial Fiscal Policies

March 1, 2011

Mr. Anderson: On the motion. Boy, oh boy, Minister of Energy.

Mr. Speaker, I rise today to respond to this government’s pro-posed budget. When the Alberta Liberals accuse the government of treating the public purse like their own limitless supply of Mo-nopoly money and the NDP start banging the drum for more responsible fiscal management, you know there’s a really, really big problem over there.

Budget 2011 is the latest in a string of damaging fiscal decisions made by a big-spending Progressive Conservative Party, that has lost any remaining right, if it had any, to call itself fiscally conservative. The numbers are painful: a $3.4 billion deficit, three times higher than what they predicted it would be last year, an additional $2.7 billion, to be spent on provincial capital projects, that isn’t even included in the government’s final deficit number, bringing the total cash shortfall to an astronomical $6.1 billion, exceeded only by last year’s record $7.8 billion cash shortfall.

This $6.1 billion shortfall will be paid for out of our savings fund, the sustainability fund. That savings fund was at $15 billion just last year. By the end of this year it will be a paltry $5 billion and only a year or two away from total annihilation. Our heritage fund, when adjusted for inflation, is now worth as much as it was in 1981, and the PC plan for balancing the budget is based on the hope that all-time record-high resource and income tax revenues are just around the corner. They also hiked user fees for vehicle registrations by 20 per cent and for registering a new business by 150 per cent. For a government whose flagship bill last year was designed to make Alberta more attractive for business, they just made it 150 per cent more expensive to start one. What a total embarrassment.

The bottom line is this. This government’s spending addiction has squandered almost every cent saved over the last 15 years, has depleted our heritage fund to 1981 levels – 1981 levels – and the government’s plan, so-called, to balance the budget consists of praying and hoping for $140-a-barrel oil prices and the magic doubling or tripling of provincial GDP growth.

The irresponsibility of this budget is absolutely stunning. Less than 24 hours after this government delivered their budget, our caucus, the Wildrose, delivered ours, the balanced budget alternative document. In it we have outlined a plan to balance the budget this year without resorting to cuts to health, education, seniors’ programs, or other vulnerable Albertans.

We propose balancing the budget through three primary means. First, we will limit the increase in spending for core social pro-grams by the rate of inflation plus population growth, 2.2 per cent last year. This means a modest increase of a few hundred million for our health, education, social supports, seniors, child services, and other key social programs while freezing or moderately lowering less critical departmental budgets. This would save us $900 million when compared to the continued unsustainable PC hikes to core program spending of 6 per cent in health care, 4.5 per cent in education. In a time of large deficits this is simply too much.

Second, we would spread the existing PC three-year capital plan over an extra year or an extra two years, like our friends the Liberals are calling for. Just an extra year. This would mean that infrastructure spending this year would total roughly $4.2 billion, which is still slightly higher than the B.C., Ontario, Quebec aver-age. I guess the President of the Treasury Board or perhaps the Energy minister would find our friends in Quebec, Ontario, and B.C. to be extreme fiscal conservatives. It just makes no sense that they would call us that.

We would propose focusing that $4.2 billion on infrastructure to the most critical projects such as schools for Beaumont, Airdrie, Chestermere, Fort McMurray, continued work on the Calgary and Edmonton ring roads, and the doubling of highway 63 to Fort McMurray.

We would also invest millions into expanding long-term care facilities for seniors currently living in hospitals, thereby freeing up thousands of new acute-care beds in existing hospitals around the province. Doing so would allow us to postpone billions in spending on new acute-care facilities until we can actually find and pay for the health professionals needed to staff them.

Although protracting the PCs’ existing capital spending plan is necessary to balance the budget this year, we would again note that the Alberta Liberal Party recommended a much more drastic approach in their 2011-12 pre-budget recommendations by encouraging the government to stretch the existing three-year PC infrastructure budget over five years instead of the four we are proposing. Although such a commitment to fiscal prudence is laudable – and indeed such measures may one day be necessary should the PCs continue their reckless spending behaviour – the Wildrose feels this degree of delay in infrastructure investment to be unnecessarily drastic at this time and feels that stretching the PC’s current three-year capital plan for a single additional year would deliver the savings necessary to balance the budget deficit in 2011.

I would ask the government this. If you claim our plan is extreme, do you feel the Liberals are right-wing nut jobs for proposing even steeper spending reductions? Or is it possible that

you have lost all sense of what it means to be fiscally conservtive? Albertans clearly agree with the latter conclusion.

Finally, we would cut tens of millions of dollars to wasteful PC pet projects and vote-buying schemes such as the infamous $2 billion carbon and capture waste boondoggle, $115 million for new MLA offices, tens of millions in direct grants to corporations, and shrink the number of cabinet ministers from 24 to 16. These Wildrose proposals would result in a balanced budget for 2011 and put our province back on the road to financial health for both current and future generations.

The PC government continues to claim that if Albertans want to balance the budget before 2012, they must choose between either tax increases or deep spending cuts to core social programs as well as shelving priority infrastructure projects like schools and long-term care facilities. This claim by the government is a blatant falsehood. It is meant to generate fear and take advantage of Albertans’ commitment to taking care of the vulnerable, ensuring quality, universal health care, giving our children the best education possible, and building key infrastructure. It is fear mongering, and it is blatantly dishonest.

Balancing the provincial budget does not require cuts to front-line health services, education, or funding for the vulnerable, but it does require a government that is able to prioritize needs before wants and that refrains from elaborate and expensive vote-buying schemes that do nothing to improve the lives of Albertans, only the fortunes of the PCs at the ballot box.

This government is gambling with all of our futures. Its balanced budget strategy consists of banking on Middle East turmoil to drive up energy prices. Do members in this House realize how lucky we are as a province? Alberta’s resource royalties provide a revenue stream that no other province even comes close to enjoy-ing. To put things in perspective, the Canadian provincial all-time record for resource revenues collected in a single year by a province other than Alberta was British Columbia’s $4.5 billion in 2005. Even during the low point of the 2008 recession Alberta’s low end for resource revenues dropped to just under $7 billion, off a high of $14 billion – $14 billion – three times the record of the next-closest province, in 2006.

This year resource revenues are projected to be a robust and healthy $8.3 billion, not including land sales, yet despite this our province remains drowning in a sea of red ink. It is virtually unfathomable that we could have a $6 billion cash shortfall under these circumstances, but here we sit. We cannot continue to rely on the good fortunes of high energy prices compensating for reckless and out-of-control spending habits. We live in a volatile world with uncertain economic times ahead. Technological advances and a shift away from carbon-intensive fuels will eventually result in lower energy prices and therefore lower resource revenues for the people of Alberta. As a province if we do not begin planning for this reality now, we run the risk of leaving our children with a legacy of structural debt, bankrupt social programs, higher taxes, and a dearth of economic opportunities.

And what of our savings? What will we pass on to our children and our grandchildren? Will they even know what it means to have the Alberta advantage? As a father of four this eats away at me every time I walk into this Chamber. Albertans have rallied behind the initiative to put away some money to offset temporary and unexpected declines in oil and gas revenues. This rainy-day sustainability fund totalled $15 billion just last year. It is now projected to plunge to roughly $5 billion this year, during a time when oil prices have never been consistently higher. When the sustainability fund runs dry, our province will be forced into choosing between cuts to core services, increased debt, higher taxes, or perhaps a combination of all three.

Albertans also supported the establishment of the Alberta heritage fund for the purpose of saving a percentage of our nonrenewable oil and gas revenues to ensure the Alberta advantage will remain for future generations, long after oil and gas become less important and therefore less valuable in the world’s economy. This government has pillaged our children’s savings repeatedly, to the point where the heritage fund is worth less today when adjusted for inflation than it was in 1981, 30 years ago. No growth. We have squandered every penny. This is a deplorable legacy to leave future Albertans given the unprecedented oil and gas boom of the last decade.

Furthermore, one failure that has gone largely unnoticed is the large amount of liabilities and debt entered into by the government over the past several years. The Alberta capital bonds sold in early 2010 are just one example. Recent borrowing for capital has re-turned us into debt to the tune of $5.2 billion this year, and you can see this in the government’s own 2011 fiscal plan document, page 79.

Even more significant are the unfunded pension liabilities, which have soared to over $10 billion. The 2010 DBRS report puts our combined total of tax-supported debt and pension liabilities at an astounding $27 billion, almost more than double what it was just a few years ago. With our sustainability fund approaching empty and the heritage fund losing value, our children and grand-children will be left holding the bag unless we change the way we manage the finances of this province.

Mr. Speaker, I would ask: what has happened to our province? Where has the commitment to our children’s future gone? Will we leave them nothing? After all the oil and gas is gone or after its value declines, what legacy do we plan to leave them with?

The President of the Treasury Board said yesterday, answering a reporter’s question, that the government wouldn’t consider a provincial sales tax until our oil and gas ran out. He said: that would be a conversation for our kids to have. What a thing to say. Was not the whole dream of setting aside some of our nonrenewable resource wealth in the heritage fund so that our children wouldn’t have to make the decision to hike taxes or slash social programs in the future? Wasn’t that the whole Lougheed legacy, that our children and grandchildren could enjoy the same or an even better Alberta advantage than we had? I do not know the exact date that this government decided to throw that dream under the bus, but it is clear they have, and our kids and our grandkids are going to pay the price for it. They may have to raise taxes. They may have to go without core social programs that we have today because we’ve been irresponsible in this House.

Mr. Speaker, one of the ballot questions for the 2012 election is becoming clear. Can we as Albertans really afford four more years of this government’s financial management? The sea of red ink flooding the Legislature at this time would suggest not.

Thank you, Mr. Speaker.

The Speaker: Hon. members, Standing Order 29(2)(a) is avail-able. Hon. Member for Calgary-Currie, you rose first.

Mr. Taylor: Actually, Mr. Speaker, I would like to speak to this later, after 29(2)(a).

The Speaker: Okay. Edmonton-Riverview, under 29(2)(a)? Pro-ceed.

Dr. Taft: Thank you. I listened with care to the speech from the Member for Airdrie-Chestermere, and several issues came to my mind. I won’t point them all out or raise them all for discussion. I’m sure we could have a good discussion.

I noticed that the member talked about protecting spending on core programs, yet later in his speech he used the term “out-of-control spending.” When you really look at the numbers for spending on health or education or social services or housing, if you look at them from a lens that adjusts for inflation and population growth, they’re not out of control. It’s just a myth. In fact, by some measures our spending on health is really very low. As a percentage of our economy, for example, it’s running at 3 or 4 per cent in Alberta as opposed to, you know, 15 per cent or something in the States.

So I would really ask the member to choose his words carefully in the future because you can’t square that circle. If you’re not going to cut core funding, which you say you’re not, and you’re not going to raise taxes, then I don’t see how you’re going to balance the budget.

The Speaker: Hon. member, if you wish.

Mr. Anderson: I’m glad to have the opportunity to clarify that. This is how you do it. Our budget proposes a 2.2 per cent increase in operational health spending. That’s roughly $340 million. It’s a lot of money. It’s nothing to slouch at, that’s for sure. We think we need to do that, and if we can hopefully focus that on more procedures and on getting more procedures done than we did last year, that would be, of course, the best way to spend that money. So we’re not proposing to cut the health budget. We are proposing to increase it slightly, in control, at a rate that is sustainable over the long term. However, where we do make most of the savings, actually, is by extending the capital plan from three to four years.

Now, some of that would include health capital, and I’m glad you brought that up because I’d like to touch on that. One of the problems that we have in our system right now is that we are spending literally billions of dollars on infrastructure, specifically health infrastructure under the leadership of this health minister and previous health ministers, building buildings that we have absolutely no staff to put in. If you look at, for example, the south Calgary hospital, that’s a huge amount of new acute-care capacity as well as other capacity that is being built there, that will be done in the next couple of years. When that’s done, AHS doesn’t even have in their documents the budget to staff that hospital.

What’s going to happen is the same thing that happened at the McCaig Tower when that was opened. You open up this brand new, shiny facility, and I forget the exact number of operating rooms that are in the McCaig at this time – I don’t have that num-ber in front of me – but they opened up a whole two operating rooms in the McCaig Tower. Two. This is during a time when we have physicians coming to our caucus all the time – and I’m sure the Liberals are the same and have physicians probably coming to them all the time – saying: we can’t even get operating time right now. Yet we opened up two operating rooms in the McCaig Tower out of however much potential capacity is there.

The problem is that there’s no budget. They keep building all this acute-care infrastructure, and there’s no budget to staff it. Not only that, what they should be doing, hon. member, is focusing their resources and their capital budget on long-term care. If they focused it on long-term seniors’ care and moved some of these seniors who are living in hospitals when they should be living in assisted living or long-term care out of the hospitals and into long-term care, they would open up hundreds or even thousands of acute-care beds across the province. That would solve a lot of our budget issues without having to spend gargantuan amounts of infrastructure on new acute-care facilities that we can’t even af-ford to staff.

That’s one way that we can actually do more with less, and that’s what is so dumbfounding, let’s say, about the way this government has handled our health care system up until this point.

Thanks for the question.