Edmonton

Fraser Institute report finds Alberta spending outpacing population growth

The Fraser Institute has released a critical report on program spending in Alberta over the past decade.

Report says province must 'carefully control expenditures'

The Fraser Institute has released a critical report on program spending in Alberta over the past decade.

"Oil revenues aside, if the current Alberta government wishes to have a better menu of fiscal choices in the future, it must carefully control expenditures,” study author Mark Milke said in a statement. (Fraser Institute)

Titled Fumbling the Alberta Advantage: How Alberta Squandered a Decade of High Energy Prices, the report’s authors argue that spending has outpaced population growth and inflation.

“Over the past decade, the Alberta government has significantly increased spending on items such as unreformed public-sector pensions and labour agreements that were double the rate of inflation, putting the province on tenuous financial footing,” said study co-author Mark Milke in a statement.

The study calculates that program spending in Alberta jumped from $29 billion, or $8,695 per person, to $43.9 billion, or $10,967 per person, between 2004 and 2014.

Authors say the province could have saved $49 billion in that time had spending been restricted to inflation plus population growth, leaving an $8 billion surplus in the 2013-2014 budget.

“In recent interviews, Premier Jim Prentice has warned that the drop in oil prices will drain $7 billion from expected government revenues. But this ignores the effect of past decisions to ramp up program spending beyond inflation and population growth which is just as much responsible for the current budget gap,” Milke said.

"Oil revenues aside, if the current Alberta government wishes to have a better menu of fiscal choices in the future, it must carefully control expenditures.”

The Fraser Institute is an independent research and educational organization based in Canada.

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