Saturday, February 21, 2009

Government Plan: Do nothing and everything will be okay.

Smiling Iris, Alberta finance minister, appeared in front of media on Thursday to announce that Alberta will lose 15,000 jobs and carry a $1 billion deficit from 2008/09.

Let's look at the government estimates over the course of the year:

DateRevenueOil (Est)Oil (Act)ExpensesSurplus

April 2008 Budget

$38.6 B



$37 B

$1.6 B

August 2008 - Q1 Update

$46.6 B




$8.5 B

November 2008 - Q2 Update

$39.9 B



$37.9 B

$2 B

February 2009 Update





-$1 B

It will be interesting to see how the revenue and expense numbers fill out when Evans releases her third quarter update next week. If she knows the $1 Billion deficit number, then she likely knows the other numbers and is trying to release information slowly.

What I found particularly interesting though are some of the rose-colored glasses type statements made in the press release.

The province’s economy is expected to recover beginning in 2010 with modest economic growth. Evans said Alberta is well positioned for recovery, with low unemployment and inflation, a strong resource base, a competitive tax regime, an investment- and business-friendly environment, significant financial assets, and a fiscal framework designed to deal with the ups and downs of volatile resource revenues.

“As we emerge from these turbulent times, we will position Alberta to be the engine of the Canadian economy,” she said.

The government has convinced themselves that Alberta is above the rules of
global economics and that this global economic catastrophe is simply a one,
maybe two, year long wave that we can just ride over.

They go on to discuss their plans for weathering the storm:

The Alberta government’s plan for weathering the downturn includes keeping a close eye on government spending, drawing from its emergency savings to protect the programs and services Albertans rely on, continuing to build public infrastructure to support jobs and the economy, and promoting the province to a global market.

These actions include ... maintaining a low and competitive tax environment - which was enhanced this year with the elimination of health-care premiums, resulting in the injection of $1 billion back into the economy. Government will also continue to invest in public infrastructure through the 2008-11, $22-billion capital plan, a commitment that far outstrips that being spent elsewhere in Canada.

This isn't a plan! This is a combination of tired Conservative rhetoric (keeping an eye on spending, promoting the province to a global market, maintaining a competitive tax environment) and previously announced plans that public pressure forced the government to undertake (overcoming the vast infrastructure deficit, eliminating health care premiums).

This government has always lacked real innovative foresight and been slow to react to legitimate concerns of Albertans. This is a time for real leadership and a real plan instead of tired rhetoric and rose-colored glasses.

No comments: