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Tag Archives: Financial Crisis

By: Clement Nocos

Alberta’s economy has been riding a “bitumen bubble” that is set to burst. Alberta Premier Alison Redford’s recent announcement on the poor state of the province’s fiscal well-being is surprising on the surface. Alberta is the wealthiest “have” “petro-province” seemingly swimming in “petro-wealth”, albeit one of the most unequal in terms of wealth distribution, so why is the government strapped with $6 billion shortfall in revenue?

The simple answer, according to the provincial Wildrose Party, is too much spending which is peculiar considering the province has one of the lowest spending per capita governments in the entire federation. Some could point to a slowing global economy. Others could say Alberta’s oil industry isn’t big enough and needs to find more buyers. Whatever the reason, Alberta’s financial woes are not good news for the rest of Canada.

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Underneath it all are the historic missteps and missed opportunities in establishing Alberta’s oil industry that have led to this latest fiscal hiccup. The continued deregulation of Alberta’s oil and tar sands has certainly allowed corporations to expand the industry to the size and breadth that it enjoys today, but the continued revenue-reducing (i.e. tax cuts) of the Alberta government has wreaked havoc on its ability to share wealth throughout the federation, much less,  its capacity to fund its own social spending.

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In recent years, governments around the world have been forced to confront increasingly unsustainable debt levels. The financial crisis has forced massive deficit spending as governments strove to provide stimulus to contain the economic recession. As a result of decreased investor confidence in the credit-worthiness of several governments, some have proposed the adoption of austerity …

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