Action Alberta had an interesting post the other day.
With permission we repost a slightly edited version.
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Here is a thought-provoking, timely recently sent by a father to his family. We thought that it was so instructive that we are repeating it here! You may wish to consider sending it to your family as well!
On May 5, 2015, I wrote a heartfelt email to all of you …… [His thoughts today follow]
Over the last 4 years Alberta’s net financial assets have decreased by $47 Billion. During that period the equity in Alberta housing has decreased by an estimated $27 Billion. Based on a population of 4.3 million, that means that every man woman and child is on average $15,000 poorer today than in 2015 – $60,000 for a family of four.
In 2014, 431,000 individuals were employed in the resource sector while 467,000 were employed in education, healthcare and public administration. (all numbers from Statistics Canada). In late 2018, 401,000 individuals were employed in the resource sector while 551,000 were employed in education, healthcare and public administration. During that period the public sector added 84,000 jobs (18%) while that portion of the private sector shrank by 7%. The government’s share of total employment is now 23.2% – the highest in decades.
Corporate and personal income taxes (provincial & federal) have increased dramatically and we now also have a carbon tax which was not mentioned in the NDP’s 2015 campaign.
Cost of Government
Even after 4 very tough years, the cost per capita ($12,717 ) of delivering Alberta’s government services, continues to be 14% higher than the average cost for the 4 largest provinces. No attempt has been made to reduce those costs or otherwise balance them with the vastly reduced revenues experienced during the downturn.
When the NDP took over in 2015, Alberta had no provincial debt. The debt is forecast to be $71 Billion next year and is projected to grow to over $100 Billion in the next 4 years, IF the NDP are re-elected.
What About all of the Other Social and Non-Financial Issues?
Healthcare wait times? Average class sizes? New schools & hospitals? Environmental stewardship? Human rights? Personal freedoms? Commitment to the arts? The rights & freedoms of the LGBTQ and other defined groups? Other social issues?
If the economy is not strong, the budget not balanced and the debt not brought under control, the province will not be able to afford to adequately deal with those issues. Our standard of living, which has already materially eroded under the NDP, will continue to deteriorate. Societies that put their financial house in order first have the flexibility to address the other needs and wants of the citizens. The extreme example of a country that followed the spend/borrow/tax/repeat path can be seen in the disaster that is Venezuela today.
Who will have to pay back the debt?
My generation will not be around to service the interest and repay the massive debt that your government has incurred. That burden will fall to my children and their cohort and to the children of that group. Interest on the debt, together with repayment of principal, will become an increasingly more painful annual cost which government can only fund with increased taxes – a vicious downward spiral.
Living Within One’s Means
I am very proud of the fact that each and every one of you understands how to budget responsibly and that you are committed to living within your personal means. The Alberta government forecast says they will run another $6.9 Billion deficit this year, which means they will have to borrow those funds at ever-increasing rates because the province’s credit rating has been materially impaired. The City of Calgary continues to substantially live beyond its means with misplaced priorities and many programs introduced in better times and are now much too expensive to maintain and in some cases of questionable utility.
The federal government’s aggregate deficit under the Liberals since 2015 is $60 Billion and the recent budget confirms they are planning to run further deficits totaling an additional $66 Billion over the next 4 years, IF re-elected.
I only have one very important question for each of you:
Do you think it is time for the Alberta government to exercise the same level of financial discipline and prudence that each of you is required to demonstrate in your personal lives?
I am hopeful that your answer to that question will guide your decision at the ballot box on April 16th.
P.S. If you would like to learn more about these important issues please refer to the excellent paper linked below, which I “borrowed” heavily from and which was written by David Yager, an associate of mine.
David Yager is a Calgary-based oil and gas writer and energy analyst. This commentary is adapted from his forthcoming book, From Miracle to Menace – Alberta, A Carbon Story, which will be released later this year and is eagerly anticipated by Action Alberta.
Our report “Carbon Pricing Consequences for Alberta” reviews some of these issues: