Budget 2017 signals- Opinion and Questions

The content of the article from the Edmonton Journal (19 September) below is likely to be repeated many times over the coming months before next Spring’s 2017 budget. The article quotes the Health Minister and Deputy Premier speaking with addictions’ treatment officers. Her choice of words is most interesting: “I have a deficit and the price of oil is a fraction of what we’re seeing it at.”  The use of “I” suggests that senior cabinet members may now recognize that having been in office for nearly 18 months, they will be held accountable for deficits and not the former Progressive Conservative government. They now have to cope with a fiscal reality that perhaps they (and their advisers) hoped would not persist.


As the Minister expressed to this audience, she would “like to provide far greater than we are today.”  It must be agonizing for Ms. Hoffman and her cabinet colleagues to be sitting around Treasury Board and listening to senior officials provide economic and budget updates these days.

September is traditionally the time in the budget cycle when cabinet and caucus come back from the summer recess and learn from their officials what to expect fiscally over the course of the next six months. Presumably one of the items that may be raised will be the province’s cash requirements over the next several years. Should oil prices remain subdued,  investment will remain weak, and employment will stagnate implying lower revenue.  Sound advice at this stage might consist of a number of scenarios (high, medium, and low) along with probabilities for each.

Already we have heard disappointment from Edmonton’s Mayor Don Iveson about the province supporting “only” 25 per cent of funds for the LRT- not the 33 per cent expected. This surprise is taking place in spite of the Province’s commitment to the David Dodge inspired capital investment program.

Still the Government’s all-consuming dilemma remains how to engage with its population about the need for change.  One day a politician in opposition opposes the status quo and the next she or he is a representative of that status quo they had maligned. How can the permanent public service serve as agents of change when they, arguably, seek stability (or equilibrium)?  How can a civil service which has been dependent on resource revenue to fund new and existing programs cope with persistently low oil prices?  What alternatives are there that are certain?  Solar panels on every roof or mass solar farms?  Diversification?  More grants for small business?  Loans from ATB?  Hope that the price of oil will rise soon?

Policy options and solutions that once appeared so straightforward, even common-sense, are more complicated than what one thought once in power. Where to start?  Where to abridge the status quo?  Does personnel changing in government, the public service or  agencies, lead to meaningful change or does institutional weight carry the day?
















Carbon tax: The real debate is about the revenue16-10-16 GM

Provinces make case for more federal money for health care16-10-16 GM







This entry was posted in Budget on by .

About albertarecessionwatch

Former Director, Institute for Public Economics, University of Alberta and currently Fellow of the Institute. Former executive with Alberta Treasury Branches. Worked for the Alberta government for 12 years with Federal and Intergovernmental Affairs and Alberta Treasury. Areas of focus: financial institutions legislation and policy, government borrowing, and relations with credit rating agencies. Ph.D in Political Science (Uof A), Masters of Public Administration and BComm. (Carleton University). Author of Politics and Public Debt: The Dominion, the Banks and Alberta's Social Credit. Presently working on study of Alberta provincial agency board appointments.

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