Opinion: Notley’s wrongheaded path leads to deficit disaster

None of us can control all the circumstances we face. What we can control is how we respond to challenges. These choices often make the difference between positive and negative outcomes. It’s no different for governments. New governments aren’t responsible for the fiscal problems they inherit. They are, however, responsible for choices they make in office that can help solve those problems or make them worse.

Premier Rachel Notley’s government undoubtedly inherited a very difficult set of circumstances in Alberta. But there’s nothing unusual about a new government taking office only to find a fiscal mess. Canadian history is replete with such examples.

In 1993, Prime Minister Jean Chretien’s government inherited the legacy of nearly three consecutive decades of federal budget deficits and debt that was reaching a crisis point just as the Liberals assumed power.

Around the same time, Bob Rae’s NDP government took office in Ontario in the midst of a nasty recession in the province; economic pain was spreading and a big budget deficit loomed.

When Roy Romanow’s NDP government took power in Saskatchewan (also in the early 1990s), his province faced a genuine fiscal crisis.

And thanks to years of unsustainable spending growth by its Progressive Conservative predecessors and a recent downturn in resource revenues, Notley’s NDP government walked into a $6-billion budget deficit upon entering office.

All these governments were dealt bad fiscal hands. Where they differ is how they played their cards.

While Chretien and Romanow recognized the urgent need to reform and reduce spending, Rae and Notley implemented big spending increases notwithstanding the red ink that drenched their budgets.

Predictably, these approaches produced very different results.

The Chretien government reduced spending and significantly shrank the size of government, swiftly eliminating a large deficit and restoring federal finances to good health for the first time in decades.

Romanow cut program spending by more than 10 per cent and eliminated Saskatchewan’s deficit in just three years, bringing the province back from the brink of insolvency.

But when Rae took power in Ontario, his government increased spending despite big deficits, with predictably disastrous consequences. Provincial net debt soared from 13.4 per cent in 1990-91 to 30.3 per cent in 1995-96. And the province’s finances never fully recovered.

Today in Alberta, Notley is closely following the Rae model. In her first two years in office, marked spending increases swelled the deficit even further, sparking a run up of projected net debt totalling about $10,000 per Albertan by 2019-20 – up from essentially zero in 2015-16.

Clearly, governments that inherit difficult circumstances can choose to deal with them in very different ways. And you can’t predict how well a party will perform by looking solely at their political label.

The Romanow years in Saskatchewan prove that NDP governments can slay deficits and provide sound fiscal management. Chretien’s government proved the same of Liberals, as did Ralph Klein’s Progressive Conservative record in Alberta. Similarly, all major parties in Canada have featured governments with poor records of fiscal management.

Unfortunately, by following the Rae model of spending hikes and rapidly growing debt, the Notley government is exacerbating – not solving – the problems it inherited.

Troy Media columnists Ben Eisen and Charles Lammam are analysts with the Fraser Institute.

Just Posted

Sylvan Lakers vote on Winter Village planters

Sylvan Lakers came out to visit the Winter Village this evening to… Continue reading

Vancouver concert promoter bans Nazi symbols at shows

A man was witnessed making a Nazi salute during a heavy metal show at Pub 340

WATCH: A Russian new year party in Red Deer

Hundreds fill the G.H. Dawe Community Centre for the 10th Russian Children’s New Year Party

Car hits moose north of Red Deer, driver in hospital with life threatening injuries

One person was airlifted to hospital, and another taken by ambulance after… Continue reading

Red Deer’s Ten Thousand Villages to close in 2018

This will be the last Christmas for Red Deer’s Ten Thousand Villages.… Continue reading

Watch: Man plays flaming bagpipes while riding a unicycle in a ‘Star Wars’ costume

The sight of Darth Vader, riding a unicycle and playing flaming bagpipes,… Continue reading

Owl found dead after eating rat poison leaves B.C. woman concerned

After finding the owl on her Surrey property, Christine Trozzo says the poison is a concern for kids

Dying man’s wish to see new ‘Star Wars’ movie coming true

A dying man’s wish to see the new “Star Wars” movie is… Continue reading

Bountiful polygamist believed he couldn’t be prosecuted: lawyer

Winston Blackmore’s lawyer says Blackmore did not believe he could be prosecuted

Trudeaus, Mulroneys, Erdem? Canadians who could snag a royal wedding invite

Save the date. Kensington Palace announced Friday that Prince Harry and Meghan… Continue reading

More to be done to ensure timely justice, retiring Beverley McLachlin says

Canada’s retiring top judge says more must be done to ensure the… Continue reading

Labrador mayor who was shot in face in hunting accident has died

John Hickey accidently shot himself while checking rabbit snares

Shelter dogs could go vegan in Los Angeles

Los Angeles may soon be home to a lot more vegan dogs.… Continue reading

The coolest way to serve coffee at dinner’s end

I can put together a decent dinner party. But when it comes… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month