Political Choices

A person walks into a doctor’s office, and the following conversation ensues.

Patient:  
Doctor, I keep getting these bruises on my face, and it's incredibly painful.

Doctor:
I think I see what the problem is.

Patient, relieved and excited:
Oh, thank you! Tell me how to fix it! I’ll do anything!

Doctor:
My advice is that you stop punching yourself in the face like you’re doing now. That will surely help.

Patient, red with rage and punching themselves even harder:
What a quack! And you call yourself a doctor?

On February 28, two days after delivering a provincial budget with a $9.4 billion deficit, Alberta Finance Minister Nate Horner told the Calgary Chamber of Commerce that this is a more challenging year than previous budgets, with low oil prices, global uncertainty and strain on infrastructure and services; that no finance minister wants to table a budget with a deficit; and that the province has chosen stability.

The minister knows the solution to deficits, instability, and strained infrastructure and services. He also knows that the deficit was not caused by population growth, the federal government, or even low oil prices. But just like the patient who refuses to stop punching themselves in the face, the government keeps applying the wrong remedies and wondering why nothing heals. So, to make it easier for Mr. Horner and his government, here’s the simple four-step stop-punching-yourself-in-the-face treatment plan we all need.

Step one: Stabilize revenues

The first solution is perhaps the most obvious one. So obvious, in fact, that the government publishes it annually in their fiscal plan (this year it’s on page 131), and on its website. By the Alberta government’s own calculations, if we had the same tax regime (personal, business, and other taxes) as the province with the next lowest taxes, British Columbia, that would generate an additional $16.9 billion in revenues in the 2026-2027 fiscal year. If we emulated Ontario or Saskatchewan, the difference climbs to just over $22 billion, and importing the tax regime of Quebec would generate an extra $31.1 billion. Note that even if we just copied BC’s sales tax and none of the other taxes, that would be more than enough to eliminate the proposed deficit.

What that means is that Alberta could maintain the lowest individual and business taxes in the country, eliminate the deficit, and actually generate a surplus that would help properly fund our education, health care, social services, and infrastructure, all regardless of international oil prices.

Beyond not raising taxes, however, the UCP has also opted to keep punching Alberta in the face by actually reducing the amount of tax revenues coming into provincial coffers. On January 1, 2025, Danielle Smith created a new personal tax bracket of 8% on the first $60,000 earned, removing over $1 billion in the first year alone. This was, of course, on top of Jason Kenney’s decision to cut the corporate tax rate by a third in 2020.

Step two: End the oil and gas addiction

Beyond directly reducing the province’s revenue streams, this flawed regime only serves to increase our dependence on natural resources to fund our public services and infrastructure. In 1999-2000, the last fiscal year before Ralph Klein fundamentally changed our tax regime, Alberta was raising enough from individual and corporate taxes to pay for approximately 53% of our provincial operating costs. In the 2026-2027 budget, that proportion has fallen to barely 33%. That leaves non-renewable resource revenues to make up the bulk of the difference.

The problem is that oil and gas are some of the most volatile and unpredictable revenue sources out there. In the week following the US and Israeli bombing of Iran, the international price of oil (WTI) went up by over US$20 a barrel. Every dollar change in the annual average price of WTI means a difference of $680 million to Alberta’s books. That’s the opposite of fiscal stability.

As if the province weren’t punching itself in the face hard enough, Danielle Smith’s solution to our overdependence on energy revenues is to push for more pipelines so we can produce even more bitumen and make our entire economy and fiscal regime even more dependent on one thing.

Consecutive Alberta governments have insisted that more pipelines would enable us to grow our oil and gas industry, which in turn would result in more jobs and more provincial revenues, increasing our fiscal stability and ability to fund services and infrastructure. Since the opening of the TMX pipeline in 2024, it’s true that we have been producing and exporting more bitumen than ever before. This record production, however, has been accompanied by unemployment rates regularly above the national average, and royalty revenues that are actually less than revenues from personal taxes. So, beyond the increased volatility, we are also increasing our dependence on a resource that is generating fewer jobs and revenues per barrel than it was just a few years ago.

Step three: Stop giving money away

It’s not just on the revenue side that the Alberta government is explicitly making choices that will inflict maximum pain and suffering upon Albertans. Health care is the prime example. The budget allocates over half a billion dollars more to funding private facilities to perform surgeries outside of the public health-care system, despite the evidence that this practice has actually increased surgical wait times while also increasing costs. In fact, they have recently doubled down on privatized healthcare by enabling a two-tier system where money buys access and opening the door to US-style private insurance for medically necessary procedures. In both these instances, the overall health-care budget increases, but the money actually goes to line the pockets of corporations and investors rather than toward improved outcomes. Nothing says “let me punch myself in the face” like taking the few tax dollars we’re receiving and using them to reduce services.

Step four: Stop with the chaos-making

All of this privatization is happening against the backdrop of the Alberta government’s unnecessary overhaul and reorganization of our entire health system. Blowing up Alberta Health Services to create four new, different entities in its place, and then creating a fifth entity to run administration for the four bodies is the epitome of spending hundreds of millions of dollars to rearrange deck chairs on the Titanic.

The government initially pegged the cost of the restructure at $85 million, and although there has been no reporting yet on the actual costs, the number will almost certainly be higher than that. In addition, Budget 2026 allocates $2.3 billion to Health Shared Services, the new crown corporation tasked with centralizing corporate services for the sector. After two years and hundreds of millions of dollars, the only visible results from the transition and restructuring are chaos, confusion, and frustration from staff and patients across the system. Once again, spending more to deliver less.

A similar situation plays out in education, where Alberta public schools receive some of the lowest per-student funding in the country while private schools pocket some of the highest. It’s true that Budget 2026 provides a significant increase to education funding — but  that increase also applies to private schools that are, in many cases, run by friends, donors, and even relatives of the UCP leadership. Once again, using tax dollars to subsidize private tuition while the public system suffers.

As usual, Budget 2026 highlights the degree to which the Alberta government’s woes are entirely self-inflicted. The treatment plan is simple and obvious:

• Fix the tax system to provide adequate revenues stability and reduce dependence on volatile international oil prices, while maintaining the lowest taxes in the country;
• stop doubling down on oil and gas expansion and pipelines as fiscal and economic panaceas, when history shows that it just increases over-dependence on a single resource that reduces stability and whose returns continue to decline;
• stop throwing money at privatization schemes that increase costs, diminish public services, and only serve to enrich wealthy corporations and individuals; and
• stop trying to reinvent the wheel by investing in expensive reorganizations and band-aid solutions that cost more and only serve to create chaos and confusion.

Whether it’s because their family and friends benefit from chaos and scarcity in public services, or because they value the ideologies and tactics that occasionally cause oil price spikes, it appears the Alberta government remains content to continue punching itself in the face and blaming its resulting pain, cuts, and bruises on outside forces. No amount of Turkish Tylenol will mask that pain for the rest of us.