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Two views of Alberta third-quarter financial update: Steady as Joe goes, versus 'Faster, pussycat! Cut! Cut!'

Alberta Finance Minister Joe Ceci. Image: David Climenhaga

Despite the expected opposition histrionics, Alberta Finance Minister Joe Ceci's third-quarter financial update yesterday had a distinct whiff of expectations management about it.

Yes, the economy is improving -- indeed, the Conference Board of Canada started the day with a prediction Alberta would lead the country's economic growth this year. But not too much good news just yet, thank you very much, Ceci seemed to be saying as he updated Albertans on the October 1 to December 31 quarter and forecast what the rest of fiscal 2016-2017 should look like.

After all, Alberta's NDP government may want to pour out a little more good news later -- a little oil on troubled waters, as it were. (Probably the wrong metaphor to use in this province just now, everything considered — Ed.)

Accordingly, quoth the finance minister, "We're not out of the woods yet. Far from it."

However, he added, rather poetically: 'The evidence shows that the storm clouds are starting to recede with a little more sunshine peeking through."

Leading all the mid-day newscasts yesterday, these being deficit-obsessed times, was the fact the NDP Government continues to forecast a deficit of $10.8 billion for the fiscal year, unchanged from the previous quarter's estimate but up from $10.4 billion predicted in the last budget.

That was enough of an increase to induce faux apoplexy and horror among opposition spokesthingies.

All opposition parties, naturally enough given the Kabuki Theatre of politics, didn't see things as calmly as did Ceci. Not only are we deep in the woods, according to the conservative Progressive Conservative Party, the even more conservative Wildrose Party, and the nowadays still more conservative Alberta Party, but the woods are on fire!

Heck, most of the opposition spokespeople's hair was on fire, too, metaphorically speaking -- all except Alberta Party Leader and sole MLA Greg Clark's, since he doesn't appear to have enough. (Clark said the forecast left him "speechless." Unlikely, though voters may do that for him in the next general election if he can't find a conservative party to take him on as a candidate.)

Naturally, they all saw the same solution to the province's deficit: "Faster pussycat! Cut! Cut!" they all screamed at the finance minister -- or words to that effect, anyway.

Ceci will run a deficit instead. This is because, in defiance of economic common sense, all Alberta political parties have decided that modest tax increases are not on -- a triumph, I guess, of 40 years of fantasy-based neoliberal propaganda.

The Wildrose Party's jobs and labour critic, Glenn van Dijken, called for the NDP to cut the size of government -- which, of course, means cutting the services government provides or handing them off to the profit-motivated private sector. (That's considered a good thing from the Wildrose perspective.)

PC interim leader Ric McIver complained that "this government would have you believe they have no choice but to spend, spend, spend" -- you know, pretty much like the last three PC premiers did in similar circumstances.

Oh well, as University of Ottawa economist Marc Lavoie reminded us last year, "somehow, when right-wing parties run deficits, nobody in the banking industry or in the mainstream media seems to care, whereas it is anathema when a left-leaning party does such a thing." As we'll see as the mainstream media weighs in over the next few days, some things never change.

We're also bound to hear a lot of opposition politicians claiming the "Alberta Advantage" proclaimed in the 1990s by PC premier Ralph Klein has been lost. If you hear someone saying that, you should ask them to define what they mean by the phrase. Klein's government defined it as "Alberta's existing advantage of low taxes."

So it is worth noting that "with no provincial sales tax, no payroll tax and no health care premiums, Albertans across all income ranges generally pay the lowest overall taxes and carbon charges compared to other provinces. When the full impact of new tax measures and carbon charges announced in Budget 2016 are considered, Alberta's tax advantage will be at least $7.5 billion." That's now, under the NDP.

Is Alberta better off because of the way Klein slashed government services, fired front-line health care workers and allowed infrastructure to languish to keep the books in the black? Or were we just digging out way out of the hole he dug when oil prices turned south?

If nothing else, as yesterday's fiscal update illustrates, Albertans will actually have a rare meaningful choice in approaches to budgeting when the next general election rolls around.

This post also appears on David Climenhaga's blog, AlbertaPolitics.ca.

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Image: David Climenhaga

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