As the latest fiscal statistics roll in, experts are beginning to discover how bad the economic state of affairs, in the province, really are. The budget deficit is on its way to hit record levels. At $10.9 billion, it would be the highest budget deficit in Alberta’s history.
But the Finance Minister Joe Ceci has a response. According to Ceci, the present state of the deficit is primarily due to the Fort McMurray wildfires in May, which contributed an additional fiscal burden of around $500 million to the government’s accounts. And he’s not wrong, at least not entirely. However, with the Fort McMurray explanation, the minister may be trying to hide bigger government failures.
The fire may have burned a $500 million hole in the economic fabric but there’s a lot in the new data to suggest that the government might not be so innocent.
Aside from the record deficit, there are plenty of worrisome statistics in the new data. For instance, the GDP is on track to shrink by 2.7 percent by the end of the year. And this follows the 3.7 decrease in the previous year.
The two-year economic data has never been this disastrous since the government began releasing the statistics in the 80s.
Deficit and borrowing
Continuing the streak of breaking records of regression, the statistics show that Alberta’s government would need to borrow $7.1 billion just to manage its everyday operations. This is also the first time in more than 20 years that the government has borrowed this much money just to stay afloat.
In simpler terms, the government is not borrowing money to begin new schools and hospitals. It’s borrowing money to keep the existing schools and hospitals running by paying the teachers and nurses. Brian Jean, the leader of the Wildrose Party is right when he says, “It’s clear the NDP plan isn’t working.”