50 Years of Government of Alberta Budgeting

Auteurs-es

  • Ronald Kneebone University of Calgary
  • Margarita Wilkins University of Calgary

DOI :

https://doi.org/10.11575/sppp.v11i0.53364

Résumé

This briefing note uses a newly completed time series on the government of Alberta’s finances to present a broad overview of the government’s budgetary choices since fiscal year 1965–66. The note paints a picture using broad strokes that focuses on the government’s attempts to deal with volatile energy revenues. It shows that over the past 50 years the government has made a policy choice to allow volatility in energy revenues to create volatility in its budget. This policy choice has resulted in occasional bouts of severe spending contractions and likely encouraged higher rates of spending and lower taxation than would otherwise have been observed. These outcomes are the result of the government failing to heed the advice of economists, namely, to save energy revenues and in this way establish a steady and reliable source of revenue. In the note we describe a number of strategies the government has used over the years to reduce its reliance on energy revenue. Success came only after a dramatic cut to program spending in the mid-1990s. Only during this brief period in the mid-1990s was the government able to fund current expenditures without the need for energy revenues. To use a phrase made popular in the 2015 provincial election campaign, for that brief period in the mid-1990s, the government had managed to climb “off the energy roller-coaster.” But it could not stay off, and the government, with the support of voters, returned to a pattern of financing spending growth not with taxation but with energy revenues. At the time of writing this note, the current government is suffering the consequences of a budget based on spending and tax choices that require a heavy reliance on energy revenues to find balance. Getting off the energy roller coaster requires new revenue, cuts to program spending, or some combination of the two. To remain off the roller coaster requires a commitment of the sort previous governments have been unable to stick to.

Bibliographies de l'auteur-e

Ronald Kneebone, University of Calgary

Ron Kneebone is the Scientific Director of the Social Policy and Health research division at The School of Public Policy and a Professor of Economics, both at the University of Calgary. His current research examines the characteristics of Canadian federal, provincial and municipal fiscal policy choices, and the problems of homelessness and poverty.

Margarita Wilkins, University of Calgary

Margarita Wilkins is a Research Associate in the Social Policy Program at The School of Public Policy at the University of Calgary. Her current research analyzes the finances of provincial governments and examines issues relating to poverty and homelessness. She is the co-author of Social Policy Trends, a publication released monthly by The School, which considers a variety of issues impacting social policy. She holds an MA in Economics from the University of Calgary

Références

AHSTF (2017), 2017-2018 Annual Report, Alberta Heritage Savings Trust Fund , Alberta Treasury Board and Finance. https://open.alberta.ca/dataset/3675e470-646e-4f8a-86a7-c36c6f45471a/resource/1f86ad5d-923c-47d0-816a-063fd6cacbf4/download/2017-18-heritage-fund-annual-report.pdf

Barnett, S. and R. Ossowski (2002), “Operational Aspects of Fiscal Policy in Oil-Producing Countries,” International Monetary Fund Working Paper WP/02/177.

Boothe, P. (1995), The Growth of Government Spending in Alberta, Canadian Tax Paper No. 100, Canadian Tax Foundation.

Boothe, P. and H. Edwards, eds. (2003), Eric J. Hanson’s Financial History of Albert, 1905-1950, Institute for Public Economics, University of Calgary Press.

Doern, G.B. and G. Toner (1985). The Politics of Energy. Methuen Publications.

Ferede, E. (2018). “Alberta’s Fiscal Responses To Fluctuations In Non-Renewable Resource Revenue,” SPP Briefing Paper. Volume 11 Issue 22.

Kneebone, R. (2006). “From Famine to Feast: The Evolution of Budgeting Rules in Alberta,” Canadian Tax Journal, Volume 54, No. 3.

Kneebone, R. and K. McKenzie (1997). “The Process Behind Institutional Reform in Alberta,” in Bruce, C., R. Kneebone, and K. McKenzie (eds) A Government Reinvented: A Study of Alberta’s Deficit Elimination Program, Oxford University Press.

Kneebone, R. and K. White (2009). “Fiscal Retrenchment and Social Assistance in Canada,” Canadian Public Policy, Volume 35, Issue 1: 21-40.

Kneebone, R. and M. Wilkins (2016). “Canadian Provincial Government Budget Data, 1980-81 to 2013-14,” Canadian Public Policy, Volume 42, Issue 1, March, pp. 1-19.

Kneebone, R. and M. Wilkins (2018). “Recent Changes to Provincial Government Budget Reporting in Alberta,” SPP Communique, The School of Public Policy, Volume 10, Issue 1, February.

n.a. (1979). “Municipal Debt Reduction Program Completed,” Municipal Counsellor, Alberta Municipal Affairs, Volume 24, No. 6, November/December, pp. 13-20.

van den Bremer, T. and R. van der Ploeg (2014). “Digging Deep for the Heritage Fund: Why the Right Fund for Alberta pays Dividends Long after Oil is Gone,” SPP Research Papers, Volume 7, Issue 32, October.

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Publié-e

2018-10-03

Numéro

Rubrique

Briefing Papers