Provincial government mismanaging money, MLA
Airdrie MLA and Wildrose finance critic Rob Anderson has publicly slammed the provincial government for mismanagement after the Fraser Institute released its report on Alberta’s net worth.
The report – released on Oct. 23 - stated that from 2006/07 Alberta’s net worth has decreased from $34.5 billion to its present assets at $12.1 billion.
“If your investment manager lost 65 per cent of your portfolio’s net value in six years, you’d fire him in the blink of an eye, yet that is precisely what this government has done,” Anderson said. “Revenue has remained at near record levels and our economy remains the envy of the country, if not the world. There is simply no reasonable excuse for the PCs to have destroyed our fiscal situation and squandered our wealth to this extent.”
The study highlights how Alberta’s net financial assets declined to $12.1 billion by 2012/13 from $34.5 billion in 2006/07. The decline, according to the Fraser Institute — calculated to the end of March 2013 — does not reflect any province-specific costs of relief for homeowners and businesses hit by flooding in southern Alberta in June.
“Ironically, on the revenue side, Alberta’s finances in the past decade were never hit as badly as they were in the 1980s but the province is nonetheless replicating the previous decline in Alberta’s financial assets, this because of near-historic per capita highs on program spending,” Mark Milke, contributor with the Fraser Institute stated in the release of the report. According to the report, current per capita program spending is $10,564 for the fiscal year, which has increased from $2,861 from the year 2000 and $867 higher than 2006/07 when royalty revenues were peaking.
Anderson said the report’s central message is that Alberta is about to repeat the mistakes of the 1980s and 1990s, in which the province’s net worth fell $36 billion leading to record levels of public debt and years of cuts to core services in order to get Alberta’s books back in order.
“We have been down this road before and the PCs insist on taking us down the road again,” Anderson said. Minister of Finance Doug Horner said that while the perceived net assets for the Province are lower today than they were in 2006, the report isn’t painting the full picture for Albertans.
“It’s unfortunate that they are characterizing it in the way that they are,” Horner said.
He explained that the $17 billion was spent on capital projects over the time frame of 2006 to the present and used the $1.5 billion Calgary South Hospital as an example of that spending.
The Global Financial Crisis, which affected economies world-wide in 2007 through 2008 occurred during the timeframe identified in the report, and Horner added that of the $4 billion spent during that period, a majority of it was in Municipal Sustainability Initiative funding, which was given back to municipalities throughout the province.
“You’re talking about the Stoney Trail, hospitals, schools” Horner said. “Those are things that the $17 billion (was spent on).”