U of C economist Ron Kneebone, author of the report, said Tuesday that both the government and opposition parties must answer three fundamental questions about financial planning.
Most importantly, they must make clear to what extent they are willing to trust the payment of health care, education and social assistance costs to oil and gas royalties as opposed to taxation.
“Alberta is in trouble,” Kneebone told reporters.
“Governments must obey budget constraints. There is no left or right-wing with this. It’s a matter of arithmetic and a matter of common sense.”
Kneebone said politicians also have to make clear how tolerant they are of deficits and how they define investments in social infrastructure, which can be funded by borrowing or spending non-renewable resource revenue.
Alison Redford’s Progressive Conservative government banked heavily on oil royalties in the 2012-23 budget, which projected an $886-million deficit. But lower-than-expected oil prices and a steep discount for Alberta bitumen have led to a massive revenue shortfall and a deficit that could be far more than $3 billion.
The government’s promise of a surplus in the 2013 budget that will be released on March 7 has also been sent awry.
Original Article
Source: calgary herald
Author: James Wood
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