Getting Government Spending Back on Track
 

In this column I have repeatedly outlined the importance I place on careful government fiscal planning and spending restraint. Our community’s school shortage or lack of 24-hour health care will not be solved by pouring billions more of taxpayer dollars into broken provincial education and health systems; it will be solved when government prioritizes needs before wants and gets out of the business of shovelling out billions in corporate grants, vote-buying pet projects, and other wasteful spending.

This week, debate will continue on my recently introduced private members Bill 204, The Fiscal Responsibility (Spending Limit) Amendment Act. This Bill proposes to limit year-over-year increases in overall government spending to the rate of inflation plus population growth. A recent poll of 1200 randomly selected Albertans found that 79.7% Albertans support this initiative, while only 14.3% oppose it. Let’s see if the Government MLAs vote for what their constituents clearly want, or if they tow the PC Party line. Below, is a portion of the speech I have prepared in support of Bill 204:

Bill 204 is necessary because our province is spending beyond its means. Despite record-high revenues over the past 5 years, despite a recession that although difficult was not remotely as deep or as long as the last two to hit Alberta, our financial picture has become very bleak.
 

Our sustainability fund is set to expire in roughly 2 years.  We are not only burning through our savings, but accruing billions in debt for future generations to pay. And sadly, any interest made on the Heritage Fund over the past decade has been spent on the here and now, leaving not one cent for our kids and grandkids during a time when our natural resources have never been worth more and may never be worth as much again.
 

This Government’s per person spending has been first or second in the country for a very long time.  Not only is this is unsustainable, but Albertans are not getting good value for their money. We see this with a health care system on the brink of collapse as our emergency room doctors detailed this past week; and we see this with a massive school shortage in many municipalities like Airdrie and Chestermere, while perfectly good schools in mature communities are closed and unnecessary new ones opened. We are constructing billions of dollars worth of infrastructure with no money left over to staff it. We may be completing a lot of buildings and roads, but how do we expect our children to staff and maintain them all 20 years from now if we can’t even afford to do so today. What kind of legacy is that?
 

In my view, spending away our rainy day fund within a few short years and piling up billions in new debt on the backs of future generations to dull the pain of a self-inflicted spending hangover is the height of irresponsibility. So too is expanding the size of government entitlement programs to the point where the only way to adequately fund them is to substantially raise taxes and increase debt on future generations.
 

Bill 204 is the first step in a spending addiction recovery program. If we can take this first step as a province – the road back to fiscal sustainability is achievable.
 

Not only does this kind of spending guideline make intuitive sense, it is not a new invention.  Similar initiatives have proven to be very effective in other jurisdictions and this plan is endorsed by the Alberta Chamber of Commerce, the Fraser Institute, the Canadian Federation of Independent Business, and the Canadian Taxpayers Federation among others.
 

This Bill will have the effect of curtailing the size of government bureaucracy.  Departments will look for innovative ways to provide more efficient and better social services and infrastructure by carefully planning and reallocating existing resources rather than simply asking for more funding while outdated and wasteful programs and practices continue.
 

Bill 204 will make our long-term fiscal planning much stronger.  By knowing what our expenditures will be down the road we will be better able to engage in long-term tax and debt reduction planning.  This Bill will also allow for a more manageable long term savings strategy. This is due to the economic fact that over the long term GDP and the tax revenues generated there from will outstrip the rate of inflation and population growth. This means we can save more and we can tax less over time. What a proud legacy it would be to turn a sea of volatile non-renewable oil and gas into a mountain of permanent investment capital compounding with interest each and every year. This would ensure the Alberta Advantage would increase rather than decrease over time.
 

This would be a legacy we could have been proud of. It is legacy that we can still build, but we have to start now; and passing Bill 204 is a first step in the right direction.