Finance Minister Travis Toews and the panel. (Supplied by Government of Alberta)

By David Opinko

Report: Government needs to “go beyond merely cutting spending” to eliminate deficit

Sep 3, 2019 | 12:09 PM

LETHBRIDGE, AB – A key report on Alberta’s finances has come back and makes several recommendations on how government spending and organization should be changed.

Panel Chair Janice MacKinnon, a former Minister of Finance with the Saskatchewan government, says, without a serious change in direction, Albertans will be paying $3.7-billion each year just on interest payments on debt. The overall debt has grown from $13-billion to $60-billion in the last four years.

“The panel found that Alberta has lost its competitive edge in attracting investment and is seen as being over-regulated with lengthy processes and uncertain timelines.”

She believes that raising taxes is not the answer to the province’s financial woes. Instead, MacKinnon claims that it will take an approach that goes beyond just cutting spending.

When it comes to healthcare, the panel recommended moving more services away from hospitals towards community-based facilities, utilizing healthcare professionals beyond doctors and nurses, changing the pay structure for doctors, and relying more heavily on the private sector to handle day procedures.

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She advised cutting spending on administration in the K-12 sector and changing the current funding formula to “provide incentives for sharing services and achieving better student outcomes.”

When those students graduate and pursue a post-secondary education, they could find a system where there is less of a reliance on government grants to help out with costs. MacKinnon suggested a model like B.C. and Ontario where there is more student funding from “alternative sources”.

The panel chair took issue with the fact that approximately 55% of the current provincial budget goes towards paying public sector workers.

“Public servants in Alberta have benefitted from generous compensation and benefits as well as job security during the recession. Thus, balancing the budget will necessitate restraint in the compensation and the size of the public sector.”

Overall, MacKinnon admits that her report requires some “difficult choices” to be made, but that they are necessary.

If the province takes immediate and swift action, she believes that Alberta could be deficit-free by the 2022-2023 fiscal year.

While the contents of the report are merely recommendations, Finance Minister Travis Toews says they will help to formulate the next provincial budget, which should be tabled in October.