Spending increases above inflation, population growth hurt ‘Alberta Advantage’: study
Posted Feb 19, 2015 7:31 am.
This article is more than 5 years old.
As Alberta faces some tough choices about its financial future, a new report suggests it’s a mess of our own making.
A study from the Fraser Institute says unnecessary program spending increases over the last decade have hindered the ability to balance the books.
According to the study, government spending has increased $49-billion higher than inflation and population growth would require since 2005.
Mark Milke, Senior Fellow at the Fraser Institute, told 660News by last year the province was spending more than $2,000 more per year, per person on programs than a decade ago.
“They didn’t have the money at the end of the day this year for balancing the books, they didn’t have the money for Heritage Fund deposits, and they didn’t have money for things like new hospitals and schools because they spent way above population growth and inflation on programs,” he said.
Milke said it’s not necessarily waste, but the province signed lucrative contracts with government employees unions including a 5-year wage deal with teachers in 2007 which was double the rate of inflation, dumped $1.2-billion into the teacher’s pension plan in 2009 and hasn’t done any pension reforms.
The study suggests that had the increases been restricted to inflation plus population growth, the government would have had $8-billion in fiscal room in the 2013/2014 budget.
