Alberta spending short-changes other priorities: study

Fraser Institute highlights a $41 billion splurge during fiscal 2005/06 to 2012/13.

CALGARY — Increased spending on government programs has diverted taxpayer money away from other top priorities in Alberta, says a Fraser Institute study.

Post-boom spending in Alberta: A $41 billion splurge and lost opportunities, compares Alberta’s program spending (government sector salaries, for example) with other types of spending and investment.

Mark Milke, study author and senior fellow at the Fraser Institute, notes over the past decade Alberta’s government has increased spending on things such as government salaries and pensions.

He cites as an example fiscal years 2005/06 to 2012/13, when the province spent $300 billion on government programs. That was $41 billion more than needed to keep pace with Alberta’s population growth and inflation, according to the study.

On a per person basis, spending on government programs in 2012/13 was $10,672, a sharp rise from $8,965 in 2004/05, when Alberta had fully returned to the high per person spending of the early 1990s.

The study notes the provincial government spent $50 billion on capital projects such as schools and hospitals.

“There’s no doubt that greater control of program spending would have freed up funds for capital projects, thus reducing the need to borrow money,” Milke said.

According to the study, the province collected $67.5 billion in personal income taxes and 61% of that ($41 billion) went to program spending that exceeded inflation and population growth.

Milke identified the Alberta Heritage Savings Trust Fund as another missed opportunity. During that time just $4.5 billion was deposited — or roughly one-ninth of the extra $41 billion spent on programs

The Fraser Institute is a public policy research and educational organization with offices in Vancouver, Calgary, Toronto and Montreal.

Click here for a copy of the study.

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