Smith government wastes generational opportunity in Alberta

Smith government wastes generational opportunity in AlbertaIn its first budget, the Smith government had a golden opportunity to use Alberta’s surpluses—fuelled by a temporary windfall in resource revenue—to improve the province for the long-term. When resource revenue is high, the province enjoys surpluses and largely spends them away, but once resource revenue inevitably declines, the province falls into deficits. Finally, the government could have used the surpluses to re-establish a rainy-day account based on the previous Alberta Sustainability Fund. After determining a stable amount of resource revenue to include in the budget annually, the government would automatically save any resource revenue above that amount in this rainy-day account to be withdrawn in years when resource revenue falls below the stable amount. In its first budget, the Smith government squandered an opportunity to forge a new fiscal path in Alberta and sustain the province’s finances for the future.