In tough times, private sector enterprises are forced to cut expenses, find efficiencies, streamline operations, innovate to develop new, more cost-effective ways of doing things.
Every government should have the discipline to do the same. And frankly, that should be a constant effort.
There is much to worry about if the royalty revenue forecasts in Alberta’s new budget are off. They likely could be, considering they depend are on things like on-time completion of the TransMountain and Line 3 pipelines. And if those projections are off, then some very tough decisions will have to be made.
Albertans continue to demand top-notch public education and health-care services – and Alberta is a high per capita spender on both, particularly on health care. Could these services be more efficiently provided? But that requires tough decisions, too. And even with efficiencies, these services will continue to be costly – yet Alberta remains the only province in Canada without a provincial sales tax. At some point, this demand, combined with an unwillingness to pay for it, is unsustainable.
There is a line in the new budget that speaks to new tax credits “to spur diversification and growth for small- and medium-sized businesses.” The problem is two-fold: tax credits cost money, not directly but in lost revenue, and money is often not the answer to diversification. Often the problem is that new ideas and innovations don’t move forward because of a regulatory system that is too burdensome, too slow, and unresponsive to rapidly changing technology, or too protective of other entrenched interests – consider Uber ride-sharing, a perfect example. More effective in achieving real diversification, and less costly, would be a regulatory environment that goes from saying “No” to new ideas and ways of doing things, to “How.”
Finally, the new budget gives Albertans their first look at where carbon tax dollars are going. There remain a significant number of politicians, Albertan and provincial, who are pushing to reverse both the Alberta and federal carbon-pricing policies. Their argument goes that the system we have now makes us less competitive in terms of attracting investment. Beware: calls for reversal of carbon pricing will actually make things much worse.
This is because, more than almost anything, foreign investors (indeed, domestic ones too) need certainty. Policies that swing back and forth like a pendulum are a real problem. Now that we have finally moved on carbon pricing, the worst thing we could do is swing back again.
– Martha Hall Findlay is president and CEO