[LINK] "Alberta squandered oil wealth with big spending, Fraser Institute says"

[rfmcdonald]

CBC's Tracy Johnson described how, at least judging by the examples of Alaska and Norway, Alberta squandered its oil wealth.

In the next week, Alberta will release its third-quarter fiscal update. It's not going to be pretty.

Premier Jim Prentice says the drop in energy prices, particularly for oil, has drained $7 billion from government revenues. This fiscal update is widely expected to show the province sliding into a deficit for the current fiscal year.

A report from the Fraser Institute says it didn't have to be this way, and that with some restraint, Alberta could still be in surplus and have saved billions in the Heritage Savings Trust Fund.

Ten years ago, before the boom started in earnest, Alberta spent $8,965 (in 2013 dollars) per person in program spending. This does not include capital spending on items like hospitals, schools and roads.

The report argues that had the province increased program spending in the following years at the rate of inflation plus population growth, it would have spent $295 billion on programs over the next nine years.

Instead it spent $345 billion, a $49-billion difference. Last year alone it spent $8 billion, a little more than the expected hole in next year's provincial budget.