Nobody had a plan

Just as Calgary was abandoning work to celebrate Stampede Week, then-premier Ralph Klein breezed into town wearing a white Stetson, to declare Alberta debt-free. It was a stunt, of course, because there still was a little bit of debt outstanding. But a special bank account had been created, with just enough money in it to pay the last of the bills, as they came due.

Just as Calgary was abandoning work to celebrate Stampede Week, then-premier Ralph Klein breezed into town wearing a white Stetson, to declare Alberta debt-free.

It was a stunt, of course, because there still was a little bit of debt outstanding. But a special bank account had been created, with just enough money in it to pay the last of the bills, as they came due.

It was a double stunt, of course, because people had known for years that Alberta had cash and assets well in excess of its debt, and in financial terms we were never in a negative situation.

But a lot of those assets — the Heritage Fund in particular —were plundered year after year so that Klein could make his declaration in time for Alberta’s Centennial party.

That was in 2005. In the years following into 2009, debt-free Alberta enjoyed a string of surpluses that could only happen in an oil-exporting country.

And everyone knows what happened when that cycle ended. In about six months, all that wealth vanished. It’s gone.

With more than a decade of surplus budgets under its belt, in 2009, Alberta is in record deficit. What happened? Did nobody remember Alberta’s economy — like that of the entire world — is cyclical, and plan accordingly?

The headline in Tuesday’s paper read: Deficit headed for ‘uncharted territory.’ Of course the territory is uncharted, because the same government that’s been in power since the 1970s through several booms and busts, never makes plans for a downturn.

Don Getty, in his turn as cabinet minister and premier, back when the Heritage Fund still meant something, had no plan. And neither does current premier Ed Stelmach.

Billions that could have been invested or loaned for good return were instead used to pay down low-interest debt. When that was gone, billions more were locked into a Stability Fund that ended up providing no stability at all.

It vanished in a heartbeat, and Alberta is facing a record deficit, after just one half of one fiscal year.

All solutions to this problem are on the table, the government says, except for instituting a sales tax. That’s off the table, and most of us can guess why. The only province with a flat income tax (which favours the rich) is somehow averse to a flat sales tax (which collects more money from the rich because they have it to spend).

But a sales tax would be a loss of face; the government would have to admit it couldn’t manage properly in the best of times, and therefore is pretty suspect as managers in bad times.

So they’ll pass the buck on to the municipalities. Capital improvements, which the Tories held to a minimum all through the boom years, are going to be pushed back once again, when they’re needed all the more.

Hospitals will be closed or downgraded, adding to the crowding and stress on all the others.

Schools will begin increasing class sizes as retired teachers are not replaced.

Horse racing will still enjoy millions in grants from the taxpayers.

That’s all still on the table — with as large an increase in taxes as government pollsters believe we can stomach.

Let’s face it, the Tories are just plain bad managers. Have been through three premiers.

If there are municipal officials or local council members still willing to show up at a Tory fundraiser, you have to wonder if the government will subsidize having their heads examined.

Greg Neiman is an Advocate editor.

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