The Fiscal Reckoning – Alberta’s Q1 Update

Governments spend significant time considering how they might characterize their own fiscal position. The Premier’s wordsmiths went to the wall with the headline announcing Alberta first quarter fiscal update, saying Covid-19 and global oil price collapse crush province with historic deficit.

To punctuate the point, the minister used his remarks in the chamber to note that Alberta outspends almost all other provinces on a per capita basis, while also citing former Saskatchewan (NDP) Finance Minister, Janice McKinnon on the need for fiscal prudence. Naturally, many will ask how the government will address this historic deficit. On that point, the Finance Minister was not forthcoming. The goal of the exercise today seemed to be to frame the situation and condition the public and unions to expect more spending reductions.

But earlier this week we did learn that the government expects new investment, economic growth, and job creation to be the engine that will help drag Alberta out of deficit, though they didn’t actually say so.

Tuesday’s cabinet shuffle was small in some respects, impacting only four departments, but the consequences are significant. Especially important for the economy was the announcement that Doug Schweitzer would become the Minister of Jobs, the Economy and Innovation (formerly Economic Development, Tourism and Trade).

While running Justice, Minister Schweitzer received accolades for his work on rural crime, spending weeks criss-crossing the province to meet Albertans, precisely what the Premier was looking for in a minister who has responsibility for wooing investment to the province. The newly beefed-up ministry will give the minister the tools he needs to attract investment, create jobs, and encourage innovation.  The Premier, never known for his patience, will lean heavily on Minister Schweitzer to produce results.

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