Policy choices don’t just influence us today, they influence the well-being of our children and grandchildren. As young Albertans enter the workforce today, they are paying the price for the past 20 years of debt accumulation by seeing more of their tax dollars go to debt interest instead of services.
In 2004-05, the province of Alberta stood proudly as a beacon of fiscal responsibility, achieving a remarkable milestone of being essentially "debt-free." At that time, its financial assets surpassed the remaining small amount of debt on its balance sheet. This feat ushered in an era where Alberta enjoyed the luxury of minimal debt interest costs, a stark contrast to other provinces grappling with significant debt burdens.
Fast forward to the present, and Alberta finds itself grappling with a fiscal hangover from the past two decades, with its debt trajectory on an alarming upward trajectory. The government anticipates paying down $3.2 billion in debt in 2023-24, yet the taxpayer debt is set to reach a staggering $76.1 billion by the fiscal year's end, signalling a daunting challenge that threatens to cast a shadow over future generations. How many hospitals, schools, roads, doctors, nurses, and teachers could we have if that $3.2 billion in debt service was actually available? It is staggering.
Amidst this fiscal quagmire, it becomes imperative for the government to heed the timeless wisdom encapsulated in some basic rules of money. These rules, which espouse principles of financial prudence and foresight, offer a road map for sound fiscal management that can help steer Alberta back towards a path of stability and prosperity.
First, the government must prioritize paying itself first. Just as individuals should set aside savings before allocating funds to spend, Alberta must prioritize building reserves and financial buffers to weather economic storms and unforeseen challenges.
Second, by controlling spending, adhering to strict budgetary discipline, and curbing unnecessary expenditures, the province can stem the tide of escalating debt and rein in fiscal hemorrhage. We define our future by what we are courageous enough to say ‘no’ to. If Alberta’s government wants to put the province on a safer fiscal footing without raising taxes further, it must bring spending into closer alignment with more reliable and permanent and diverse sources of revenue.
Furthermore, wise investment strategies are indispensable for securing long-term financial sustainability. Alberta must judiciously allocate fiscal resources towards initiatives that yield tangible results, fostering economic growth and prosperity for its citizens. Simultaneously, guarding against extreme losses with risk management mechanisms safeguards against unforeseen disasters that could exacerbate financial woes. Imagine how much better we would have weather COVID-19 if we had no debt and a robust heritage trust fund to support the journey.
Equally crucial is the establishment of a robust long-term business plan (beyond chasing the four-year vote cycle) to ensure the well-being of future generations. By investing in human capital and providing opportunities for skill development and education, Alberta can empower its citizens to secure their financial futures and contribute meaningfully to the economy.
We need efforts to enhance earning potential through innovation, entrepreneurship, and workforce development. By investing in infrastructure, technology, trades, and industries of the future, Alberta can create a conducive environment for economic growth and job creation.
Lastly, Albertans need a clear understanding of the province's financial position and how we are charting a course towards fiscal sustainability. Transparency, accountability, and prudent fiscal management are non-negotiable principles that must guide governmental actions.
In confronting Alberta's fiscal challenges, there are no easy solutions. However, by embracing the principles outlined in these rules of money, the government can lay the groundwork for a brighter economic future. It is incumbent upon policymakers to demonstrate the courage and foresight necessary to make tough decisions, prioritize the long-term interests of Albertans, and steer the province towards prosperity for generations to come.
