The Alberta budget, The Path to Balance, offers a long and winding road to balance the books when a short straight line would do the trick. Similar to losing weight, the government must step on the scale, set targets and make disciplined decisions to curb their appetite for spending.
New survey data from the Canadian Federation of Independent Business (CFIB) shows that four out of five Alberta entrepreneurs think the 2023-24 time frame to balance the budget is not soon enough. In fact, more than half of small business owners want to see the provincial government back in the black by 2020.
In recent years, the province has been downgraded by several credit-rating agencies. The main criticism has been not having a concrete plan to get the books balanced. The budget tabled by Finance Minister Joe Ceci still lacks a tangible plan to actually stop the red ink beyond relying on optimistic projections for economic recovery.
There is a disconnect between this budget and the expectations of small business owners, as government debt and deficit is ranked as the second biggest concern for small business owners in Alberta, second only to the growing tax burden.
There is no shortage of ideas on how to balance the books on a more expedited basis. Ninety-three per cent of Alberta business owners want the province to reduce existing spending by shrinking the size of government (i.e. not replacing retiring workers) and freezing public sector wages.
According to CFIB’s Wage Watch report, Alberta government employees make a 17 per cent premium on their total compensation, including wages, salary and benefits, compared to those working the same jobs in the private sector.
Addressing the behemoth of rising government operational spending would provide the biggest opportunity for savings. This typically makes up half of the government’s total spending. Alberta now borrows to simply keep the lights on. That simply can’t continue.
Small business owners know that today’s deficits and debt are tomorrow’s taxes. Businesses are expected to balance their budget on a regular basis, why can’t governments?
It will take discipline for the government to say no to its own insatiable spending appetite, but balancing the budget is the healthy fiscal choice.