Graham Thomson penned a piece on Alberta’s economic woes in the Edmonton Journal in which he wrote, “there is no worse crime in politics than to have bad luck.”
Bad luck is the key term here. It’s what the NDP government wants you to believe is the cause of the record breaking economic failures in the province. The Finance Minister Joe Ceci says that the economic troubles, and particularly low tax revenues, are due to the “impact of the weak economy and the Wood Buffalo wildfire.” Swiftly and silently, he’s trying to sweep the government’s failures under the rug.
Notley’s nightmarish spending habits
Alberta’s budget deficit is about to reach $11 billion this year, which is a staggering record. The two-year slump in the province’s GDP is the lowest in the last 20 years. And the only logical solution for the problem of the mounting deficit is a cut in spending. Ceci, however, disagrees: “We’re not going to make knee-jerk cuts. We’re not going to make things worse for Albertans.”
In a way, this statement reaches the heart of Alberta’s economic problems. The dismal statistics are not result of some wildfire or imaginary economic problems. It’s a result of NDP’s unwavering resolve to stick to the path of disastrous spending even if they have to borrow $7 million just to keep their government afloat.
Oil and tax
As the government continues on its spending spree, two of the most prominent solutions to its economic troubles lay in open sight.
First is the increase in oil revenue. The price of a barrel of oil has recently increased from US$42 to US$45. This has boosted the overall oil revenue by about $744 million. But the government shows no sign of capitalizing on this increased income. Instead, the deficit continues to mount.
The second problem is taxes. Conventional wisdom may suggest that increasing taxes means more income. And this is what Notley’s government did. She raised the corporate tax rate from 10 to 12 percent earlier this year. The result? Tax revenues fell by a staggering $900 million. The increased tax gave the companies more incentive to shift their profits outside Alberta.
It is clear that whatever plans the NDP has to save the economy, they’re clearly doing more harm than good.