Welcome back to the era of Miami Vice, Huey Lewis & the News — and Deficits
Now that Alberta has entered the fiscal red zone — Alberta’s third quarter update forecast a $1.5 billion deficit instead of the $1.5 billion surplus predicted in last year’s budget — it’s useful to ask how the province ended back up in the Don Getty years.
After racking up an impressive 14-year record of surpluses (which ranged from $938 million in fiscal 1995 to a high of $8.5 billion in both the 2006 and 2007 budget years), the province is now back in a deficit position. The reason for that is not merely low oil and gas prices — Alberta balanced the books both when oil and natural gas prices were high (2006 and 2007) and when prices were low (early in this decade). The reason for Alberta’s newest deficit is that program spending has expanded well beyond combined inflation and population growth — as the accompanying three tables and graphs will document.