Guest Post: Fiscal hawks’ formulas for cutting spending don’t really fly in the face of reality

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PHOTOS: The Alberta Government’s Dash-8, used and abused by Premier Ralph Klein so that he could smoke while in transit between Calgary and Edmonton (Photo: Wikimedia Commons). It’s not just what you spend, but what you spend it on, says Guest Post Author Bob Raynard, below. Below him: former Conservative premiers Klein (Photo, Chuck Szmurlo, Wikimedia Commons) and Alison Redford, both of whom saw no problem spending public money on government aviation.

Guest post by Bob Raynard

Irresponsible levels of government spending is a theme we have heard a lot about from opposition politicians and conservative media outlets. There are, however, a couple of ideas that need to be considered, which to date haven’t really seen the light of day.

Although much has been said about how much money our provincial government is spending, there has been almost no criticism of what the government is spending it on.

There have been no reports of the current premier building herself a “Skypalace” and nothing equivalent to abusing government airplanes, something not only Alison Redford did, but Ralph Klein did too, just so he could smoke on the plane.

Similarly, there has been no money wasted on pet projects pandering to the party’s base, like the self-described good money managers have implemented and advocated.

Things such as senator-in-waiting elections or lawsuits fought just to make a point when there is no hope of winning are huge money wasters that serve nothing other than advance a conservative agenda. Examples of these ideologically driven lawsuits would include joining Saskatchewan Premier Brad Wall’s challenge of the federal government’s authority to implement a carbon tax, or fighting Omar Khadr’s successful lawsuit.

The closest Premier Rachel Notley’s government has come to something like this would be the money spent promoting the initiative to address climate change, which unfortunately became necessary as a result of the work of climate change denial groups and even opposition politicians.

Given the resources available to the opposition parties, and especially the deep pockets of the Canadian Taxpayers Federation, the Fraser Institute and the like, it’s a pretty safe bet that if inappropriate spending did happen, it would be exposed.

This, I would argue, is why we hear opposition members complain loudly about the money being spent but they fail to present examples of the government’s profligate ways.

Simply put, the money is being spent on projects or programs important to at least some Albertans. Jason Kenney wouldn’t dare cite a new library in Tinyville, or a program helping spousal abuse victims, as examples of wasteful government spending if he has any hope of getting votes from Tinyville, or spousal abuse victims.

Another idea that needs to be challenged, and never seems to be, is the notion that a government should restrict spending increases to the rate of population growth and the rate of inflation. While limits based on the rate of inflation make sense, the idea of tying spending to the rate of population growth needs to be rethought.

On the face of it, this idea appears to make sense. When the population increases by 5 per cent you hire 5 per cent more teachers, and buy 5 per cent more tongue depressors for hospitals. What could be more straightforward?

The problem is, where do those new teachers teach? Unless they are expected to hold their classes in the playground, they need a classroom around them. The same line of thought can be applied to any new hires caused by population increase. New surgeons will require new operating rooms; new firefighters will need new fire trucks.

Remember when Conservative premier Ed Stelmach defiantly declared he would not put the brakes on the Alberta economy when it was booming? He said it in a way that seemed like it was a no-brainer, but there are downsides to an overheated economy, and one of them is the infrastructure demands population growth will create. This is a demand that has largely been unmet. The number of years Sherwood Park waited for a hospital is a classic example.

The population of Alberta has increased by approximately 1.3 million people since 2001. This is the equivalent of another Edmonton- or Calgary-sized metropolis that has needed to be built in the past 16 years. That’s a lot of streets, schools and hospitals. Government spending at the time by in large did not meet it.

Challenged to build new infrastructure, Mr. Klein argued that the time to engage in a building spree was when the economy was down, when labour costs were lower and government spending was needed to stimulate the economy. Mr. Klein said that, of course, when the economy was red hot and he welcomed an excuse not to spend.

The “increase spending with population growth” argument almost has merit if it is applied only to operational spending. (Government spending is generally categorized as capital expenses, which are one-time purchases like the cost of building a new hospital, and operational expenses, which are everyday costs, such as salaries and consumable goods like paper, utility costs, etc.).

The reason this argument lacks merit is because a lot of minor capital expenses fall under the category of operational costs. Examples would be new desks, textbooks and the photocopier needed for a new school to become operational, or beds and an x-ray machine for a new hospital.

Viewed in this light, it is easy to see how the present government could escalate spending as much as they have without moving into wasteful spending – previous governments have left a tremendous backlog of very deserving projects and programs.

A statistic that fiscal hawks like to highlight is how Alberta’s per capita expenditure is much higher than that of B.C. This is where the rates of population growth must be considered. The 1.3 million who came to Alberta since the 2001 census is a 43-per-cent increase in population. By comparison, B.C.’s population grew less than 18 per cent in the same period. To imply Alberta’s spending requirements are the same as B.C.’s is absurd.

Irresponsible government spending is a theme we will continue to hear about from the United Conservative Party in the next several months.

Considering Alberta’s tremendous growth in the past 20 years, we really have to wonder how much of the irresponsible spending is actually a result of previous governments engaging in irresponsibly low levels of spending. Yes, the deficit needs to be addressed, but irresponsibly low spending levels are not the answer.

Bob Raynard is a retired teacher who lives in the Edmonton area and a regular contributor to AlbertaPolitics.ca’s comments section.

Categories Alberta Politics