I thought the current provincial government campaigned on a platform to be more fiscally prudent than the previous NDP government.
I guess I was wrong.
According to last week’s provincial budget, the province is forecasting its revenues assuming the price of oil will be in the $58 range per barrel (per bbl) in 2020-21.
As of Friday, Feb. 28, the price for West Texas intermediate crude, the benchmark price for oil, was $51.61 per bbl.
Even Finance Minister Travis Toews has acknowledged that the price of oil is extremely volatile.
He may be right – it may climb to $58, or even higher.
Or it might plunge – to $45 or lower.
Who knows?
Some politicians are fond of saying government should be run like a business.
There aren’t many business people around who would construct a business plan based on the hope that revenues might reach a certain point, just so they can eventually balance the books.
No, the prudent thing to do would be to lowball one’s revenue estimate so that you’re sure to get that money, and if revenue goes higher, that’s a bonus.
Furthermore, Toews and his staff are banking on an influx of investment driven by further cuts to corporate taxes and the growth in the energy sector as pipelines get built.
Have they not been watching what’s been going on in the country with the blockades by Wet’suwet’en hereditary chiefs and their supporters in B.C. and other parts of the country?
Not to mention the decision by Teck Resources to withdraw its planned Frontier oilsands project and the long-running battle against the Trans Mountain Pipeline project?
With all those factors at play, it’s hard to see where all this expansion is going to come from.
And there’s one other anticipated fly in the ointment — the impact that the current coronavirus outbreak could have on the Alberta economy.
It seems prudent to assume Albertans won’t be immune from that virus as it spreads around the country and the world.
To be fair, by anticipating higher revenues to make the books look better, this provincial government is not unique.
Governments in this province through the decades have done that, including the NDP.
However, that doesn’t make that strategy right.
When crafting its budget, the United Conservative Party government should have taken the advice it has given others – craft the provincial budget the way you would your own household budget. Don’t rely on income you may not receive.
Doug Collie is an editor with the Mountain View Albertan.
