Unless Alberta’s government restrains spending, by the end of the decade Alberta’s debt may well exceed even pessimistic forecasts, finds a new study published today (March 31) by the Fraser Institute, an independent non-partisan Canadian policy think-tank.
“Given economic conditions in the province, if the government fails to restrain spending, the pace of debt accumulation in Alberta may be extremely rapid,” said Ben Eisen, associate director of provincial prosperity studies at the Fraser Institute and co-author of How Much, How Fast?: Estimating Debt Accumulation in Alberta through 2019/20.
Unfortunately, successive Alberta governments spent as though boom times would never end and the current government has continued the trend towards higher program spending.
Consequently, this fiscal year, for the first time in 17 years, Alberta will reach a net debt position—meaning the province’s debt (liabilities) exceeds its financial assets. This is a dramatic change from 2007/08 when Alberta had no net debt and was sitting on $35 billion in financial assets.
According to the government’s spending and revenue forecast, Alberta’s debt will reach $19.8 billion by 2019/20.