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Lorne Gunter: UCP projected budget deficit better than anything NDP delivered

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The day before the UCP government brought down its deficit-laden 2026 budget on Thursday, NDP Leader Naheed Nenshi claimed Alberta’s finances had been so much better taken care of under his party. His predecessor, Rachel Notley, never ran deficits of the size the UCP have proposed for the next four years.

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Either Mr. Nenshi has a very bad memory or his calculator’s batteries have run out of juice.

Admittedly, the budget from Danielle Smith’s government is chalk full of disturbingly large deficits for the foreseeable future.

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The current fiscal year, which ends March 31, is projected to finish with a deficit of $4.1 billion versus a surplus last year of $8.3 billion on the plus side. That $12.4-billion turnaround represents a reversal of fortune of over 15 per cent in just a single year.

And it gets worse from there.

The 2026-27 budget year will produce a $9.4-billion deficit. The following year it will be $7.6 billion. And the year after that (2028-29) will see a deficit of $6.9 billion, and that’s only if oil prices rebound.

The biggest flaw in this budget is that it contains no spending restraints. The deficit rises or falls entirely based on whether the province’s revenues from resources and income tax increase or not. It’s all on the revenue side.

For instance, 2026-27 will see the province spend $84 billion, up six per cent from this year. In 2027-28, spending will go up a further three per cent, before going down in 2028-29 by about one-tenth of one per cent.

Those are not the most outrageous spending increases in recent history. But on the spending side, Notley’s NDP was fairly stingy, too, introducing spending increases during their four years in office of 7.6 per cent, 3.6 per cent, zero per cent and 3.5 per cent.

Admittedly, Finance Minister Nate Horner’s spending increases will not keep pace with projected population growth or inflation. Adjusted for these two factors, Thursday’s announced expenditures represent a net per capita decrease in spending by 2029.

But here’s where Nenshi’s claim of NDP prudence departs from reality.

The UCP’s next four deficits may be unsustainable — $4.1 billion, $9.4 billion, $7.6 billion and $6.9 billion — but the NDP’s four deficits were unforgivable. Adjusted for inflation they were $14.1 billion, $10.2 billion, $8.4 billion and $15.1 billion.

Except for the deficit projected in the coming year ($9.4 billion), the worst of the UCP’s deficits is better than the best of the NDP’s.

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The UCP are no angels. Last week they boasted they had paid down $15 billion in debt. True. But Thursday’s budget predicts they will add $28 billion to the debt by 2029 and increase annual debt-servicing costs from $2.9 billion to $4.9 billion. That’s entirely wasted money.

However, if I’m going to have to live with a free-spending government, I’ll take the UCP over the NDP any day.

A caveat, though. I have very little faith in any government’s deficit projections in the current fiscal year, let alone three or four years from now. So, if you’re convinced the UCP can accurately project its deficit will go down (not up) by $700 million in 2028-29, I’ve got some oceanfront property near Drumheller I think you might be interested in.

One last observation: Budgets are no longer truly secret before they are brought down.

In 1983, federal Finance Minister Marc Lalonde had to delay his budget by several days while it was rewritten because while doing pre-budget publicity shots he accidentally let a TV crew get a glimpse of a real budget page over his shoulder.

Now, for weeks before their budgets are released, federal and provincial governments go around announcing the spending the documents will contain. Before Thursday’s budget, Albertans were let in on the billions the UCP would be spending on teachers, doctors, extended care, the arts, tourism and other initiatives.

What’s the point of embargoing a budget if you’re just going to release the major components in advance?

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