The war over which province’s budget is better continues to rage between Alberta and Saskatchewan.
Alberta premier Rachel Notley and Saskatchewan’s Brad Wall have been trading barbs back and forth since last week.
Notley called out Wall for creating a deficit budget of $1.3 billion that involved raising taxes while Alberta’s budget created at $10.8 billion deficit on top of new spending.
Notley was in Calgary Monday and said the reason she criticized Saskatchewan’s budget was because it was proof that what Alberta opposition parties have been claiming is false.
“The significance of that budget is that it shows you can't deliver the fantasy land that the Conservatives and Wildrose say they can deliver to Albertans,” says Notley.
Wall’s budget boosts a provincial sales tax and cuts everything from public sector wages to funding for libraries with a goal of whittling down the deficit to $700 million by the end of the fiscal year and balancing the budget in three years and he was quick to criticize Notley’s budget.
“With no plans to get to balance, other than maybe that oil prices will rise or unicorns will prove to real, they don't have plan to get their budget fixed, and that wouldn't be acceptable in the province, it isn't to me,” says Wall.
Trevor Tombe is an assistant professor of economics at the University of Calgary and says both provinces find themselves in a similar situation.
”Both relied heavily on resource royalties to fund government,” says Tombe. “Both as early as 2014 had revenues from royalties about 20 t o25 per cent of the budget but with low oil prices that has evaporated and now both provinces are looking at a fairly substantial deficit.”
Tombe says Saskatchewan’s budget is the clear winner because it allows the province to be less dependent on royalties from oil revenues.
“A prudent course of action for any government that relies on royalties revenues would be to try and phase themselves off that dependence,” says Tombe. “We can talk about whether Saskatchewan went too quickly but not moving at all to rebalance our government budgets in Alberta I think is a missed opportunity.”
Tombe says there are trade-offs and tough decisions for both governments and both governments have to find a way to pay for themselves without relying on royalty revenues.
