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HILL, LI: Alberta government has a spending problem — not a revenue problem

Every dollar that goes towards debt interest is a dollar unavailable for services such as health care and education.

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According to its latest budget, the Smith government will run a whopping $9.4-billion deficit in 2026/27, the second consecutive fiscal year in the red. While oil prices have since soared, and the final budget picture could look very different, reoccurring deficits have sparked discussions about a potential provincial sales tax to generate more revenue. But Alberta’s deficits are due to a spending problem — not a revenue problem. For decades, Alberta governments have increased spending during periods of relatively high resource revenue (e.g. oil and gas royalties) but have not commensurately reduced spending when resource revenue declines, which inevitably leads to deficits when oil prices drop.

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