I am doing rather well in my predictions. I have to admit, one does not need to be a modern-day Nostradamus to have predicted that our gang of clowns governing the province would be in shock and running around like chickens with their heads cut off trying to understand how they have spent us into a record and growing deficit. Ignoring advice from many quarters, the Progressive Conservative government has continued with unrestrained, untargeted and unsustainable spending after having castrated the main industry in the province with an ill-conceived and greed driven royalty gouge. The “rainy day” savings will quickly run dry and we can look forward to putting our grandchildren in debt soon.
The PC government has realized that they were rather dependent on the revenues from the industry that they so recently demonized and drove from the province. Revenues are now down on all fronts. From field and office workers who used to pay income taxes, to land-sale revenues, to corporate tax revenue, to municipal road use revenues and of course royalty revenues the government has seen a massive drop in them all since attacking the energy industry. Sure things were going to slow down in this recession anyway. It never needed to be this bad however.The energy industry came to a screeching halt in Alberta almost a year before the world economy dropped. This is directly due to the actions of Stelmach.
Special Ed made a short appearance the other day and muttered some incomprehensible excuses to try and soften the blow for the coming budget update. Ed has now sunken down and will likely remain well hidden until the Calgary by-election is finished. The PCs have at least realized that whenever their leader speaks, they drop another couple points in the polls.
Despite all of these hard lessons for Albertans, the PC government still appears to have not learned a thing. Iris Evens looks dejected and clearly realizes that she has blown it. Still, there was no uttering of terms such as spending restraint or trying to encourage business to come back to Alberta. From all appearances the PC government looks like they intend to continue with massive spending and praying for a miracle.
I will make another prediction. Iris Evans is praying that natural gas will suddenly jump in price. Sorry Iris, hoping for it to happen will not make it happen. In the next quarter we will see yet another jump in the deficit. The world is in a slowdown and there is a glut of natural gas (not to mention energy companies don’t want to come back to Alberta right now).
In a dark-humour sort of way, I am tempted to start a pool for how long it will take and how many budget updates we will see before the sustainability fund is completely gone. It should not be too long.
The belt-tightening Albertan’s did through the 90s was a good thing. We eliminated our debt and saw a sustained boom afterwards. Ed Stelmach has managed to eliminate all of those benefits in a few short years in power. I shudder to think what he may do with three more years in power.