Jan. 18, 2012 - Issue #848: City of champions

Follow the money

New book examines where Alberta's wealth is spent

The 2008 economic crisis was a turning point for many people across North America. For MLA Kevin Taft it was time to look into the Alberta government's claims about being a big spender. After reading a report by University of Alberta economist Mel McMillan, Taft realized there was a need to sit down and look at the numbers the Conservative government continued to turn out as proof it was spending too much. Follow the Money, a new book by Taft, with the assistance of McMillan, sets out to do just that.

To the Alberta government, the 2008 financial crisis meant a renewed deficit watch. The president of the Treasury Board at the time, Lloyd Snelgrove, is quoted in the book as saying, "We were at the all-you-can-eat buffet for 10 years and Albertans were lined up with us." This comment and the following rhetoric of an inflated spending pattern over the past 10 years went against Taft's knowledge of tuition increases, health care crises, teacher layoffs—how could these actions be possible in a province that was spending too much? As Taft puts it in the book, after some simple calculations, "If metro Seattle owned outright the second-largest oil reserve in the world, would you expect it to have deficits, potholes, tuition increases and teacher lay-offs?"

Enlisting the help of McMillan is key to understanding the numbers and the success of the book. While Taft is an accomplished author, books by politicians can be viewed as politically motivated and biased, and as the intent of Follow the Money is to clear up bias, McMillan's ability to deconstruct the numbers are key to obtaining necessary clarity. McMillian has gained a reputation for going directly to the source—the raw data  and understanding how numbers are interpreted.

Number crunching is not a task taken on by many with enthusiasm, and statistics put out by governments and advocacy groups can become muddled and troublesome. It's perhaps what this new book is best at getting across: there are many ways to calculate Alberta's spending habits. Taft and McMillan meticulously go through each sector the Alberta government spends money on, starting with the purported albatross around every government's neck: health care.

In 2010 the Canadian Institute for Health Information stated that per-capita spending on health care was highest in Alberta. This number on its own can be used as ammo to prove Alberta spends at a justifiably high rate. But when put in context of Alberta's wealth, as Taft does, Alberta is dead last in health care spending in comparison to provincial GDP.

Breaking down health care by constant dollars and per capita spending is an obvious endeavour; it works nearly as an economic primer. At times the book can seem tedious, even repetitive of the conclusions that have been made previously: Alberta hasn't learned from its past. But where the book differentiates itself is Taft's ability to connect that spending history to government policy and advocacy action by workers to make sense of how economic decisions have been made.

By breaking down the spending patterns of provincial governments since the late 1980s, and contextualizing how statistics are made to look based on population size, age, comparison by province and in context of provincial wealth, the book succeeds in providing an understanding of how to start looking at provincial spending and revenue with any sort of understanding.

The book doesn't advocate any one point of action. It helps to provide context for the promises that have been made about spending, and then the reality of what spending has actually occurred.

Taft's book repeats a lot of what has been said, that the province is too reliant on the boom and bust of resource revenues. As a province we're to own the resources that exist in this province, but the provincial government needs to do a better job as a curator to the benefits of those resources. Where the book succeeds is in its deconstruction of why. Taft and McMillan attempt to clearly portray the way in which Alberta's economy has expanded over the past 20 years, while government spending on public services has stalled. Working with two economics PhDs helps to focus the issue on where the discrepancy is between the perception that the province is spending too much, and the actual picture of economic security Alberta has right now. What the book really gets across is that it's time to talk economics in this province.

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