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Alberta's Fiscal surplus, democratic deficit

Ricardo Acuña - The Parkland Institute VIA theFilter.ca
July 14, 2006

Canada Premier Ralph Klein's recent speculation about spending the province's unbudgeted surplus on a new round of prosperity cheques for Albertans highlights a serious problem with Alberta's budgeting process -- one that has received surprisingly little public attention.

The May 2006 report Fiscal Surplus, Democratic Deficit by the University of Alberta's Parkland Institute, not only correctly predicts this year's actual surplus, it also points out that the Alberta government has been wrong in its revenue projections for at least the last thirteen years.

More specifically, the report calculates that in each of the last six years, the government has underestimated revenues by an average of $4.3 billion per year.

That works out to a margin of error in most of those years of between 20 and 25 per cent. We now know that in the 2005-06 fiscal year, the government actually missed on its revenue projections by almost 35 per cent.

Only one of two things can explain erring on the budget by this much this consistently.

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