During the fall of 1981, Peter Lougheed’s government was facing stagnant government revenue and, at the same time, pressing demands for additional spending during a time of historically high interest rates and rising unemployment. This memorandum, which was not sent, reflects the Treasurer’s and Alberta Treasury’s worries that spending was spiraling beyond the limits set by the Priorities Committee.
This was an era when the notion that spending reductions really entailed reductions from what was being requested or needed or expected in light of inflation and population growth. This was an era where the capacity to raise revenue and the capacity to spend was bifurcated. At the federal level the position of Treasury Board President and Finance Minister was coincident with rising deficits, with accountability for spending and revenue-raising separated. Alberta Treasury did not yet have that bifurcation but there is a sense that a line had been crossed and spending expectations became rooted and spending ministries were gaining the upper hand.
Premier Lougheed’s role was crucial as the principal arbiter between the spenders and the guardians of the provincial exchequer. With his decision to take all investment earnings from the Alberta Heritage Fund, a ‘new’ revenue source was discovered. This tended to relieve some pressure on the revenue raising side. This decision had dramatic long-term ramifications for the Province’s financial health.
ALBERTA TREASURY
FROM: Lou Hyndman OUR FILE REFERENCE: B 5015-21
Provincial Treasurer
TO: Hon. Marvin E. Moore DATE: September 30, 1981
Minister of Municipal Affairs
SUBJECT Your 1982-83 Budget Request
Treasury has not yet received your 1982-83 budget request; however, it has been provided with preliminary data.
I am very concerned with the magnitude of the increase you propose ($72,929,000 and 33.5% increase).
You will recall in my June 29 memorandum concerning the 1982-83 budget preparations, I indicated that Priorities Committee would not be willing to deal with large numbers of variances this year. If as a government we are to achieve the reasonable expenditure targets set by Priorities Committee, I strongly urge you to re-examine your program priorities with a view to effecting significant reductions. If we fail, individually and as a team, to budget within reasonable expenditure increase targets, Priorities Committee will be driven to drastic and/or arbitrary expenditure reductions.
The major area you may wish to consider as a prime candidate for review is Support to Community Planning Services which contains your major B-Budget item the Downtown Revitalization project. While the other priorities noted in your September 18 memorandum to me do not fall in the above area, they must also be weighed against the priority support for existing programs and the overall expenditure target of the province..
Your personal attention to setting priorities between programs is therefore imperative if any of your new B-Budget process or program enhancements are to be given serious consideration.
Please meet with your officials on an urgent basis and get back to me with your budget reductions no later than October 7th. This will enable your voice figures to be incorporated into a 1982-83 budget overview document which will be reviewed by priorities committee on October 16th.
Thanks for your help – as we discussed in Banff, growth opportunities are fine – with realistic expectations.
Lou Hyndman
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Honourable Lou Hyndman, Provincial Treasurer Source: Toronto Public Library
SOURCE: Provincial Archives of Alberta. PR 1986.0245 (Hyndman Papers), File #1045.
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