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Rob Breakenridge: Premier who once railed against deficits now shrugs at multibillion-dollar debt

Alberta budget forecasts a deficit of $9.37 billion followed by more deficits, which runs contrary to the government’s own fiscal framework

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It was some tough but fair budget criticism, given the extent of the red ink and reliance on resource revenues.

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For example: “They think that all they have to do is wait out the relative weakness in oil prices, hope that they can get the pipelines built . . . hope that the bitumen royalties will continue to grow with an increase in production and hope that oil and gas prices bail them out again.”

And this: “After promising during the last election to balance the budget and stay out of debt . . . short-sighted and reckless spending will have lasting impacts on future generations, and no doubt cause long-term pain as we deal with the debt we are taking on today.”

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That’s what you’d expect to hear from a fiscal conservative, assuming there are any left in Alberta.

But it wasn’t last week’s budget those comments were about, and it wasn’t Premier Danielle Smith on the receiving end of that criticism. Rather, it was Smith herself more than a decade ago trying to hold the government to account.

How fortunate for her that conservatives have stopped caring about any of this.

We don’t have to dip back into the pre-merger and pre-floor-crossing era of Alberta politics to find a professed adherence to fiscal conservatism. In fact, we need only go back to the last provincial election, which seems completely detached from almost everything going on in Alberta right now.

The UCP’s 2023 election platform included a commitment to budget surpluses over the next four years. It was also that year that the UCP government introduced a fiscal framework law that permitted limited deficits only in emergency circumstances.

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Shortly after the election, as the UCP wobbled on its tax cut promise, Finance Minister Nate Horner talked about the flexibility from the premier on the timing of the measure “to ensure that we do not move directly into a deficit position.”

The premier and finance minister haven’t changed, but it seems principles and priorities have.

The budget we got last week forecasts a deficit of $9.37 billion, followed by subsequent deficits for the foreseeable future. This runs contrary to the government’s own fiscal framework.

Spending has reached a record level of almost $84 billion — more than $4 billion higher than forecast just over a year ago, as noted by University of Calgary economist Trevor Tombe. He has also calculated that Alberta’s reliance on resource revenues has soared to unprecedented levels.

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It would require $24 billion in resource revenue by next year just to balance the budget. That’s a problem.

There was talk last week about reviewing the fiscal framework and “larger conversations” about Alberta’s revenue structure. That’s all well and good, but don’t hold your breath. With the budget out of the way, the focus will shift to referendum day and the numerous questions the government intends to pose to Albertans.

That would be an obvious opportunity to hear from Albertans on some of these “larger conversations,” but there’s clearly zero interest in that.

We’ll then transition from a referendum campaign centred on standing up to Ottawa into a 2027 election campaign centred on standing up to Ottawa. That’s become the all-consuming focus now of the UCP. Whatever it is, it isn’t fiscal conservatism.

We’re once again — as we were when the now-premier thundered against it from the opposition benches — seeing a government trying to have it all — keep taxes low, keep spending high and use debt and oil money to cover the enormous gulf in between. There is indeed a conversation to be had as to whether it makes sense to keep doing that, but the time for that never seems to be now.

In the meantime, will the last fiscal conservative turn off the lights?

Rob Breakenridge is a Calgary-based podcaster and writer. He can be found at robbreakenridge.ca and reached at rob.breakenridge@gmail.com.

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