Smith's Referendum Strategy Diverts Attention from Alberta's Fiscal Vulnerabilities
In a televised address just before a grim provincial budget announcement, Premier Danielle Smith outlined plans for referendums on contentious issues like immigration, but notably avoided addressing the persistent risks of Alberta's volatile resource-revenue roller-coaster. The subsequent headlines focused on these referendums, suggesting a successful distraction from more pressing financial concerns.
A Glaring Omission of Accountability
During her Thursday speech and Friday news conference, Smith failed to acknowledge any responsibility or accountability for Alberta's fiscal challenges. While she critiqued federal immigration policies and constitutional matters, these are not the sole causes of the province's problems. The premier's narrative implies her government deserves credit for Alberta's successes, while blaming Ottawa for all shortcomings.
Smith has positioned herself to lead the Albert Next panel, ensuring the next eight months will be dominated by debates over federal policy failures, real or perceived. This strategy shifts focus away from her administration's own fiscal management issues.
Political Landscape and Fiscal Reality
Despite changes in Alberta's political scene, it's unlikely the province's fiscal position would differ significantly if Conservatives had won recent elections. While an influx of newcomers has occurred, the Alberta government actively promoted migration to the province. Additionally, the completion of the Trans Mountain pipeline expansion has narrowed price differentials for Western Canadian Select oil and boosted financial benefits, with Canada setting oil production records last year.
Although oil prices have recently softened, this does not constitute a crisis akin to past crashes. The anticipated dip in resource revenues for the current fiscal year must be viewed against the backdrop of record-high revenues in previous years. As University of Alberta energy economist Andrew Leach notes, Smith's tenure has seen "the highest real, per-capita resource revenue outside of the governments of Lougheed and Klein."
Budget Implications and Ongoing Risks
The reduced resource revenue expected in this week's budget would still be enviable compared to past Alberta governments. However, the premier's referendum announcements risk overshadowing these fiscal realities, diverting public discourse from essential budget discussions and the need for sustainable financial planning amidst resource volatility.
