How serious is the NDP about paying down the Alberta debt?
Alberta’s debt is the elephant in the room.
What’s Alberta’s debt situation?
The United Conservative government posted a $10.3-billion surplus in this February’s budget.
Alberta is still about $79 billion in debt. That costs Albertans about $2.8 billion in annual interest charges.
That’s billions of dollars that can’t go to tax relief, new hospitals or better roads because it’s being paid to the bond fund managers on Bay Street.
The good news is that the debt is going down for the first time in more than a decade because the UCP government put the single biggest payment on the debt in the province’s history.
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The numbers on the Debt Clock are going down. The dwindling debt is one of the reasons why Moody’s gave Alberta a credit rating upgrade in February.
The UCP has committed to making debt payments a priority by passing legislation to ensure that half of cash surpluses must be put down onto the debt. The rest of the surplus must be used to reduce the debt or towards one-time spending that doesn’t increase permanent spending.
This dedication to paying down the government’s credit card evokes the memory of former premier Ralph Klein vowing to put 75 per cent of the surplus down on the debt. He stuck to it. In 2004 he raised that “paid in full” sign when the province rolled into the black.
During this election, when politicians are cutting ribbons in front of expensive shiny objects, they ought to remember they vowed to pay down the debt.
The UCP made that promise, passing legislation saying so, and it needs to be held to that promise if it forms government again.
What’s the NDP’s plan to pay down debt?
Rachel Notley’s NDP has vowed to balance the budget every year but hasn’t made any commitments about paying down the debt.
The last Notley NDP government added more than $40 billion to Alberta’s debt while it was in power from 2015 to 2019. By comparison, the UCP government added about $17 billion between 2019 and 2023.
That kind of money could cover the average provincial income tax bill for the population of Alberta.
In 2015, Notley promised her NDP government would “balance the budget in 2018.” Notley didn’t balance the budget in 2018 or any other year.
Notley’s scorecard, while she was premier, shows four deficits and zero balanced budgets.
This time around, Notley told QR770 Calgary host Shaye Ganam that an NDP government will be “balancing the budget throughout that four-year term.”
Notley saying she will balance the budget is like saying you could score a hat trick even though you tripped on your own skate laces last time you stepped on the ice.
To be fair, Notley had softer oil prices to contend with during her time as premier, but the UCP also had the COVID mess to wrestle with.
The UCP posted two deficits of $12.1 billion in 2019-20 and $16.9 billion in 2020-21. Then it produced two surpluses of $3.9 billion in 2021-22 and $10.3 billion in 2022-23.
Debt isn’t a fun topic during the circus of an election campaign, but the weight of debt can crush a province’s potential like an elephant on a rampage.
All parties need to be accountable to taxpayers and pay down the debt.
Kris Sims is the Alberta Director for the Canadian Taxpayers Federation.
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