It is clear that the NDP government have mortgaged the future of Alberta by creating deficit after deficit to the point where we now have an accumulated debt of somewhere around $56 billion.
Debt always handcuffs economic choices. With our present debt load the province of Alberta must set aside approximately $2 billion a year just to cover the interest payments on that debt. That is $2 billion that, if we had made better economic choices, could now be spent on providing quality health care, education and other needed government services to the people of Alberta.
Many economists are calling Alberta’s debt a generational debt, in that it could take an entire generation of wise economic choices and sound fiscal decisions to pay off the debt. Albertans will have some clear choices to make in the next election. Will we reward the NDP with another term of questionable economic decisions or will Albertans choose a political party that will pursue a more responsible economic mandate?
Should Albertans choose to address our economic problems the answers will not be easy. Some argue that Alberta needs a provincial sales tax on top of the carbon tax. The argument being that we don’t have a spending problem but rather we don’t take in enough taxes. Yet this tax and spend philosophy is what has created the problem we face today.
One of the lessons we should have learned over the past three years is that government can either help or hurt an economy through its regulatory and taxation policies. During the tenure of this government we have seen business after business move their capital and infrastructure to where they can maximize their business opportunities. The result a smaller economy and fewer tax paying citizens.
The answer to our economic problems while painful and difficult are quite straightforward. We will need to reduce our spending and increase our income. We will need to start by making government more efficient and we will have to grow our economy not by increasing the tax burden on Albertans but by freeing them up to become profitable wealth creators. It starts by reducing the burden of taxation and regulation on Albertans. Capital is fluid in that businesses can spend their profits anywhere in the world. The present government has driven close to $45 billion of capital spending out of Alberta as a result of its taxation and regulatory actions. $45 billion that could have created jobs, income and ultimately a stronger tax base for the government.
We will not successfully address the economic problems in Alberta by continually raising taxes, nor by increasing the regulatory burden on businesses. Rather, at least part of the answer is to free up the creativity and economic opportunity of Alberta businesses so that the wealth generators can grow an economy that can help us address the financial hole our present government has left us in.
Mark Smith is MLA for the Drayton Valley-Devon constituency and writes a regular column for The Pipestone Flyer.