Response to MacKinnon report from Parkland Institute research associates

In response to today’s release of the Report and Recommendations of the Blue Ribbon Panel on Alberta’s Finances, two Parkland Institute research associates who are currently finalizing an alternative report on the state of Alberta’s financial picture had the following initial reactions to the MacKinnon report, and are available for further comment.

“Our research shows that compared to Canada as a whole and to its three largest provinces—Quebec, Ontario, and British Columbia—Alberta’s expenditures are not out of line. For almost the entire period from 2000-01 through 2017-18, of Canada’s four largest provinces Alberta has had the lowest provincial expenditure relative to the size of its economy. Public sector wages—a favourite target of government cuts and a focus of today’s release—are commensurate over time with those found in these other jurisdictions for the areas of educational services, health care and social assistance workers, and public administration. The differences that do exist are much smaller than the differences across the economy resulting from Alberta’s high relative earnings. Put simply, Alberta’s public sector is not much different than its comparators, either in terms of its size or in terms of its earnings.”

Dr. Richard Mueller
Department of Economics, University of Lethbridge

“Alberta’s real difficulty in balancing the books lies in its anemic tax effort. Alberta’s tax revenue with its current tax policy consistently falls short of that needed to pay for the important public services that Albertans expect. In past decades, the revenue shortfall was filled by the revenue obtained from non-renewable resource royalties, primarily oil and gas. But those days are gone, and are unlikely to return. The hole that has been dug can only be filled through a mix of various tax measures. Fortunately, Alberta has enormous tax room to meet this need—by the government’s own estimates, over $11 billion compared to the next-lowest-taxed province—and still be able to boast an ‘Alberta Advantage.’”

Dr. Robert Ascah
Former Director, Institute for Public Economics, University of Alberta

Parkland Institute is a non-partisan public policy research institute in the Faculty of Arts at the University of Alberta.