Orange Chinook by Duane Bratt

Author:Duane Bratt
Language: eng
Format: epub
Tags: alberta, politics
Publisher: University of Calgary Press
Published: 2019-01-10T22:00:15+00:00

The Current Fiscal Situation

To understand the current fiscal situation, and to appreciate what fiscal options are available to respond to that situation, it is helpful to take a closer look at recent spending and revenue choices.

Spending Choices

The provincial government’s three largest expenditures are, typically, those in support of health care, education, and social services, and so we focus on those categories. Because of the role it has played in the fiscal decisions made by previous governments, we also look at the amount the government has spent servicing its outstanding debt. Figure 10.2 presents data on these four expenditure categories since the 1980–81 fiscal year. As in Figure 10.1, the data are measured in inflation-adjusted dollars per capita.

The rapid increase in debt following the oil price shock of 1986 saw a rapid rise in debt-servicing costs. By 1994–5, the servicing of the outstanding debt bypassed spending on social services as the third largest spending category. Analysts of that period highlighted the fact that the need to pay debt holders was threatening to crowd out spending on services to Albertans as a reason why drastic budgetary action was required. Premier Klein and those who voted for his platform chose to respond with spending cuts. In the three years following Klein’s election, real per capita spending on health by the province fell by 20 per cent. Over the same period, spending on education and social services fell by 13 per cent and 29 per cent, respectively.6 The cuts left Alberta’s real per capita spending on health care 12 per cent below that of other provinces.7 After 1995, the provincial government began compensating for its earlier restraint on health spending. Between 2000 and 2008, Alberta’s real per capita expenditure on health doubled, with the result that in 2008 spending was 15 per cent higher than in other provinces.8 Over the entire period since 1995, real per capita health spending has increased 114 per cent (from $2,100 in 1995–6 to $4,500 in 2015–16).Notably, Alberta in 2015 had the highest level of expenditure per adjusted capita ($4805), with expenditure on physicians and hospitals as cost drivers.

Figure 10.2. Key Spending Categories, 1980–81 to 2015–16

Sources: Government expenditure data are from Government of Alberta Public Accounts (various years). Nominal values are deflated using the CPI for Alberta (CANSIM series v41694625). Population data is from CANSIM series v469503.

Alberta’s per capita provincial health spending in 2016 was the second highest in the country after Newfoundland and Labrador. Family physicians in Alberta paid under the fee-for-service model earned 35 per cent more than the national average, and in 2014–15 they were the highest paid in Canada.9 Alberta’s specialists under fee-for-service were also among the highest paid in Canada in 2014–15, earning 24 per cent more than the national average.10 Spending on health care, then, has been a long-standing priority, with the result that by 2015–16 it was consuming 45 per cent of total revenue, up from 18 per cent in 1980–81.

The ratio of

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.