As budget day looms, Alberta’s fiscal record pales when compared to Texas

CALGARY—Alberta enjoyed a stronger economy but Texas did a better job of balancing its books in the post-recession era, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“As the government tables its budget this week, Albertans should ask their elected officials why the province has struggled to balance the books despite a relatively strong economy,” said Mark Milke, Fraser Institute senior fellow and author of A Tale of Two Energy Booms.

Between 2000 and 2013, both Alberta (3.2 per cent) and Texas (3.1 per cent) experienced similar rates of average annual GDP growth (the value of all goods and services). Since the millennium, however, Alberta saw greater employment growth and lower unemployment rates.

So why is Alberta in the red while Texas remains mostly in the black?

Since 2000, Alberta’s per capita government program spending increased by 69.5 per cent compared with 59.5 per cent in Texas. Moreover, Alberta public sector employment grew 2.8 per cent—annually, on average—compared with 1.1 per cent in Texas.

Consequently, in the five years since the recession, Alberta’s government has not recorded a single budget surplus. Texas, meanwhile, has recorded only one deficit.

“Increased government spending and a public sector that grew faster than the one in Texas has saddled Alberta with budget deficits,” Milke said.

“If policy-makers in Edmonton want a return to balanced budgets, they could learn some lessons on fiscal prudence from Texas—for the benefit of Albertans and their families.”

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