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Why debt is necessary

I must be getting soft in my old age; I actually liked what I saw in the throne speech that kicked off the 2014 legislative session.

Further evidence: I disagree with the criticisms of both the NDP and the Wildrose party leaders, which were made following the speech.

The main problems faced by Alberta are not about balancing the budget, or how much the premier spends on plane flights, or the various definitions of debt. The main challenge our province faces is in dealing with growth.

It’s been repeated for a long time, by a variety of pundits: Alberta adds population roughly equivalent to a city the size of Red Deer, every year.

In 1970, Alberta represented about 7.5 per cent of total Canadian population. Today, it is nearly 11 per cent — and growing fast. There are more people in Alberta than in Manitoba, New Brunswick, Newfoundland/Labrador, Nova Scotia, Prince Edward Island, Yukon and Nunavut combined.

All those people want a home to live in, roads to drive on, schools, pools, rinks, parks, police, fire and health services. And the vast majority of the new Alberta residents every year want them in Edmonton and Calgary.

That’s why I approve of a keystone promise made in the throne speech: to arrive at a new charter deal between the province and the two major cities, this year. As a Red Deer resident, I can only see benefits in the deal we get, once we see the details of how revenue and power sharing between the major cities and the province shakes out.

Red Deer sees its share of growth, too. Our population growth since 2000 has varied year to year, but the average has been 3.3 per cent.

Red Deer has challenges enough creating housing, transportation infrastructure, schools, pools, rinks, parks, police, fire and health services for about 3,000 or so new Red Deerians every year. Imagine what that must be like 10 times over, in Edmonton and Calgary.

In 2001, the combined populations of our two major cities was 1,889,000. In the 2011 census, it was 2,375,000. That’s growth approaching half a million people since the turn of the century. Totalled up, that’s more than the entire population of Alberta in 1986, when my kids started going to school.

Population growth is an economic blessing, to be sure. Just ask the planners in Newfoundland and Labrador, for whom the Conference Board of Canada has predicted a population decline in the next 20 years or so. Panic and denial there.

But dealing properly with that growth is a huge challenge.

That’s why griping about Alberta’s capital debt, from Wildrose Party Leader Danielle Smith, is so off the mark.

People coming to Alberta (not to mention the people already here) want to live in a pleasant place, not a ghetto. Our province produces 70 per cent of all the job growth in Canada, and a lot of those jobs pay very well indeed.

People don’t come to Alberta to earn six figures in the oilpatch to live in a camp permanently. They want good houses in good neighbourhoods, with access to amenities as good as, or better than, those they left behind.

Alberta can’t build new infrastructure for 95,000 new residents or more every year without taking on debt. What I saw in the throne speech — more so than I’ve seen in the past — is a realization that the primary partner in providing those amenities and infrastructure is not the provincial government, but the cities.

Beginning with Edmonton and Calgary.

If the province will not accept that cities should have new taxation powers, the province must accept taking on the revenue role to pay the toll of our rapid growth. With debt, if need be.

For instance, the Municipal Sustainability Initiative grants and the Green Trip capital grants to cities need to be strengthened. Short of seeing the details in the budget at this writing, I am hopeful they will be.

Political realities must also be faced. Taxpayers may accept capital debt for roads, schools, health care and such, but not for operating costs. That’s where the NDP misses the mark.

We all agree on a certain tax rate, and government must agree to operate on that. There are still efficiencies to be realized in operations. As well, population growth does translate into revenue growth eventually.

Every time you poll the voters, they say government must live with that.

Red Deer isn’t the Leave-It-To-Beaver town I moved to in 1976. We can’t pretend it’s the same now, only bigger. Cities today operate differently; they must be a good home to a much more diverse group of people.

A power devolution toward cities needs to be written into the provincial code if we are to manage growth properly. I might be getting soft, but after all these years, I sense that Alberta’s Tory dynasty has finally woken up to that.

Greg Neiman is a retired Advocate editor. Follow his blog at or email



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