Budget Archives - Page 5 of 9

25Sep

By Bob Ascah1 Comment

Budget, Credit Ratings, Fiscal History, Uncategorized

Public Debt does matter

Earlier this year I was asked to contribute a paper on Alberta's public debt to the School of Public Policy's Alberta Futures project. My particular subject was "Alberta's Public Debt: Entering the Third Crisis." The questions I attempted to answer included: When has government borrowed too much?What will rapidly rising debt levels mean for Alberta taxpayers?What are the critical debt thresholds for the Province?What role will credit rating agencies play as they evaluate debt thresholds in relation to those in other provinces?What do higher debt levels mean for the Alberta Tax Advantage and Alberta’s long-term economic growth?What role does the federal government play in monitoring provincial deficits and debt levels? For the analysis, I went through over 100 years of Alberta's public ac...

4Sep

By Bob AscahNo Comments

Budget, Government Finances, Opinion/Research

Fiscal Outlook brightens

Fiscal Outlook Brightens The first quarter fiscal and economic update was released on 31 August. Alberta's projected deficit for fiscal 2021-22 has brightened considerably due to bitumen revenue (+$5.6 billion) and stronger investment revenue (+$1.1 billion). The government's message was "Alberta's Recovery Plan is working." The main drivers for the improved performance were revenue although spending is now expected to increase by $567-million driven by health care (+$400-million), drought relief (+$400 million) and agriculture support (+$340-million) some offset by the confusing practice of using contingency and unallocated numbers. Lower debt servicing costs were assisted by low interest rates and the significant decrease in projected borrowing as a result of the improved deficit numbe...

10Jul

By Bob AscahNo Comments

Budget, Energy, Government Finances

Budget Deficit “falls” to $17 billion

Highlights Deficit up significantly from Budget 2020 due to COVID-19 and oil price drop but lower that first quarter forecast due to rising oil prices in final fiscal quarter (January-March 2021). Government takes a $1.3-billion write-down of its investment in TC Energy’s Keystone XL pipeline. Education spending significantly lower than budget (4 %) and from last year (4.9 %). Total revenues were $6.8-billion lower than budget while federal transfers $1.5-billion higher than last year. Dark spots- government investments- Keystone XL, oil-by-rail contracts, and the Sturgeon refinery. Finance Minister Toews released the Province’s annual financial report on Wednesday 30 June. In his press release he emphasized the “notable fiscal gains made in (the) final months of 2020-21.” It was an upb...

11Apr

By Bob AscahNo Comments

Budget, Fiscal History, Government Finances

Budget 1982-83: A Message not sent

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, ...

28Mar

By Bob AscahNo Comments

Budget, Economic Data, Energy, Fiscal History, Government Finances

The Perils of Economic Forecasting in a Commodity-based Economy

In the wake of the "energy settlement" of August 1981 when Trudeau and Lougheed toasted champagne, economists at Alberta Treasury's Budget Planning and Economics group were refreshing their economic forecasts. In the Economic Outlook reproduced below, attention focused on the anticipated mega-projects expected to drive Alberta's economy in the medium term. The Outlook reinforces the notion of Alberta as a single-commodity based economy relying on the construction and engineering sectors to drive economic growth and employment. As the Chart shows, things did not turn out quite what the analysts have thought they would based on econometric models based upon assumptions about the trajectory of various mega-projects. Very shortly after the projection, an inflection point was reached in 1982 ...

8Mar

By Bob AscahNo Comments

ATB, Budget, Economic Data

Alberta Treasury Branches: Strategic Listening Posts

From the Provincial Archives of Alberta's collection of papers from the late Lou Hyndman comes an interesting case of the economic intelligence capacity of the Province's financial institution. As the Alberta cabinet's anxiety rose following the October 1980 federal budget and National Energy Program, evidence was being gathered on how damaging the federal policies were to the provincial economy. At the end of August 1981 the Office of the Superintendent of Alberta Treasury Branches (at the time the Superintendent of ATB was Fred Sparrow) prepared to update what were called "economic Assessment Reports" aggregated from Treasury Branch managers across the province. ATB logo pin Source: Pinterest The highly summarized five-page report divided the province into three "divisions"- Northern,...

28Feb

By Bob Ascah1 Comment

Budget, Capital Spending, Government Finances

Alberta Budget 2021-Analysis

Highlights Economic assumptions on balance appear realistic with some upside Spending kept flat mainly through cuts to ministries except Health, K-12 Education, and Social Services Capital spending to remain elevated although next two years see a significant reduction. No new taxes or tax increases- nothing on revenue structure review Debt levels will rise to close to government’s fiscal anchor Economic Assumptions The Government seems to be following the playbook from Ralph Klein's early years in leading the province out of what had been chronic deficits. Conservative resource revenue forecasts based on past history rather than hoped-for future prices helped return the provincial government to balance quickly. These conservative revenue forecasts restrained the public and v...

26Feb

By Bob AscahNo Comments

Budget, Government Finances, Opinion/Research, Politics

Budget 2021- the fine art form of scape-goating: Opinion

Finance Minister Toews has learned from his grandmaster, Premier Jason Kenney, the dark art of scape-goating. Budget 2021 offers more of the same- restraint in public sector spending which is, in fairness, what they have promised. Except for the disastrous decline in resource revenue and increased health spending due to COVID, the government has retreated from its promise to balance the budget in its first term. The scape-goats predictably are the federal government and the compensation levels for unionized public sector workers. The Alberta government continued to tilt at windmills like equalization payments and the federal government's environmental assessment process. Over nearly 2 years of UCP rule, total debt has risen from $92.8 billion to $133.6 billion and is projected to reach ...

25Feb

By Bob AscahNo Comments

Budget, Government Finances, Opinion/Research

Sales Tax debate will be difficult for political parties to ignore

Updated 25 February 2021 On 24 February, the day before the UCP's third budget, the Globe and Mail reiterated its editorial position about a sales tax for Alberta. This perspective will be written off by political leaders as paternalistic, unwanted central Canadian twaddle. But the mood is definitely changing as a 2020 CBC-Calgary public opinion poll indicates. The non-debate by our political leaders has also been picked up by Alberta's business leaders. In a recent report Towards a Fiscally Sustainable Alberta- A Review of Provincial Government Finances, the Business Council of Alberta (BCA) of Alberta proclaims on its website: "Alberta, we have a problem." This message is not dissimilar to the language used by the Financial Review Commission's Report to Albertans issued in March 1993- a...

13Feb

By Bob AscahNo Comments

Budget, Fiscal History, Government Finances

Budget Process: Pros & Cons of Supplementary Estimates

This memorandum from the late summer of 1981 captures the momentum of spending that had built up under the Lougheed government in 1981. As previous documents have shown, a great deal of money was being spent to cushion the blows from the National Energy Program and the attendant difficulties associated with lower oil price projections and high interest rates. As departments rushed to take advantage of a more generous attitude within the provincial cabinet to spend, the volume of additional requests suggested mid-year of supplementary estimates to presented at a fall sitting of the Legislative Assembly. Collins' memorandum attempts to get ahead of the list of Special Warrants, appropriations made by the provincial cabinet rather than the Legislative Assembly. These Special Warrants would ...