Inquiring minds want to know: Why is Premier Jason Kenney announcing big plans for Alberta’s latest windfall when he won’t be premier much longer?
Is he trying to shore up his threadbare historical legacy, in a shambles after not much more than three years as Alberta’s premier?
Or is it just Kenney’s political lizard brain asserting itself, making dubious claims in preparation for the next election – in which he won’t be running?
“Thanks to fiscal discipline and a relentless focus on economic growth, Alberta is once again in a position to save for the future,” Kenney chirped yesterday on Twitter, touting a big plan to deposit $2.9 billion of the province’s expected $13.2 windfall surplus in the long-neglected Alberta Heritage Trust Fund.
The government also said it would pay down $13.4 billion in debt coming due this year, which it described as the largest single-year debt repayment in the province’s history.
I’d wager that there aren’t very many adults in Alberta who don’t understand the reason this province is suddenly awash in cash again has nothing to do with fiscal discipline or a relentless focus on anything, by Kenney or anyone else.
If you doubt this old blogger, consider what the real experts have to say.
For example, here’s Trevor Tombe, University of Calgary economist and no one’s idea of a raging lefty: “Some in AB’s Govt are saying the surplus is due to ‘fiscal discipline’. All govts will spin, of course. That’s what politicians do. But this claim is way off.”
In the tweet thread that followed, Dr. Tombe set out the reasons why there’s only one explanation for Alberta’s sudden surfeit of cash, concluding: “To say that ‘fiscal discipline’ is the reason for the 2022/23 surplus rather than oil prices is not true.”
In other words, he explained, “Alberta’s finances are improving largely for one reason: oil prices. More than one in every three dollars in 2022/23 revenue are expected to come from natural resources. Back to early-2000s levels.”
Kenney is a rare bird: a politician who got into enough trouble to be fired by his own party at a time when the cash was pouring in through the door, thanks to events elsewhere in the world over which no one in Alberta has any control.
Things may turn around soon enough and, if they do, whoever is in power in Alberta will have to wear whatever happens as a result, no matter how unfair that seems.
In the meantime, though, what makes Kenney think he gets to decide what will be done with the $13.4 billion surging resource revenues have bestowed upon Alberta’s books?
A long press release on the province’s first-quarter fiscal update published by the Alberta Government repeats Kenney’s fib from his tweet and crows, “We promised Albertans we would get our fiscal house in order and that’s exactly what we’ve done.”
The release then goes on to announce a series of policies that Kenney’s successor, who presumably will be in a position to take up the reins of power soon after the results of the party’s leadership vote are announced on Oct. 6, may or may not wish to follow.
For starters, there’s that huge debt repayment, channelling Ralph Klein’s obsession with debt reduction at the cost of other priorities.
In addition, Alberta income taxes will be once again indexed to inflation, raising the basic tax amount this year and next. Is there any guarantee that whoever succeeds Kenney will follow through on that announcement?
Then there’s the decision, touted in Kenney’s tweet, that the UCP Government will pay $2.9 billion into the 46-year-old Heritage Fund, which has languished for years after being skimmed for interest and neglected by generations of Alberta politicians.
“We remain focused on using the surplus wisely, to benefit Albertans today and tomorrow,” Finance Minister Jason Nixon told a news conference yesterday. “Paying down debt and reducing the burden of debt each Albertan carries and building up our provincial savings funds.”
Says who? Just as Kenney won’t be premier much longer, Nixon isn’t likely to be the finance minister for a long time either.
Yes, between 1980 and 2014, Alberta frittered away resource revenues not un-adjacent to $200 billion. Some of it, presumably, was spent on useful things. Not all. Meanwhile, health care and education are in chaos and there’s only about $16 billion in the fund. Investment income from the fund goes into general revenues.
There’s certainly no shortage of Albertans clamouring for some of that money to be used for various pressing needs.
AISH, seniors’ benefits and the child tax benefit won’t be indexed, for example, so they’ll continue to shrink with inflation. “We have a situation in this province right now where we have record revenues coming in, where we have billions in surplus, and this government is allowing children and seniors and disabled Albertans to continue to struggle to pay for food,” NDP Energy Critic Kathleen Ganley said yesterday.
But surely that’s not Kenney’s call, or Nixon’s.
Expect updates!
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Nick Seebruch, editor
