Alberta wins fiscal sweepstakes

Support TNI Subscribe

Alberta Premier Danielle Smith was rated by the Fraser Institute as the most fiscally responsible sitting premier in Canada. Photo Credit: Danielle Smith/X.  

Alberta’s Premier Danielle Smith is getting a lot of abuse these days from her fellow Canadians – including many of her political colleagues – for taking a diplomatic approach to attempt to discourage the Trump administration from imposing punitive tariffs on Canada as opposed to preparing to wage a trade war that Canada can’t win. Yet on the domestic front, Smith recently notched a win by being rated the most fiscally successful sitting premier in Canada. 

An analysis by the Fraser Institute published this week gave Smith top marks among sitting premiers in fiscal management. The report assessed the performance of provincial premiers based on government spending, taxes and debt/deficits up to the fiscal year 2023/24. The distinction of “sitting” premier is important as the two top fiscal performers were voted out of office in their last election. Perhaps this indicates that Canadians don’t appreciate a government that is careful with their tax dollars. Let’s hope that’s not the case, or we’ll be in even more trouble in future than we are at present. 

The study ranked former New Brunswick premier Blaine Higgs in first place. Higgs had achieved the impressive accomplishment of six consecutive balanced budgets, including during the pandemic when most governments threw fiscal caution to the wind. Higgs was rewarded by getting kicked out of office by his Liberal opponent Susan Holt, who had previously supported the failed government of former premier Brian Gallant, a big taxing, big spending Liberal. Go figure. 

The second-ranked former premier in the Fraser study was Heather Stefanson of Manitoba, also given the boot by voters in late 2023 in favour of NDP leader Wab Kinew. The jury is still out on Kinew as he has not been in office long enough to establish a fiscal track record, but if he follows the path of other NDP politicians, the news will not be good.  

Among those Premiers still in office, Alberta’s Danielle Smith came in first for fiscal success. Smith’s record on personal and corporate taxes, as well as containing deficits and debt, were the main reasons for her rating. The premiers bringing up the rear in terms of rankings were Andrew Furey of Newfoundland and Labrador in last place, and David Eby of BC and Francois Legault of Quebec, who were tied in 9th place. 

All provinces have some way to go on the tax front in particular, as the Trump administration takes charge in the U.S. with promises to reduce both personal and corporate income taxes. Most provinces retain a personal income tax regime in which the top income tax bracket exceeds 50 per cent, which is far in excess of U.S. rates. As well, a number of provinces continue a personal tax system where tax brackets are not indexed to inflation, which is effectively theft as people are bumped into a higher tax bracket only because of inflation, not because they are earning any more in real terms. 

Ontario is a particular culprit in that respect, as the two top tax brackets in that province are not indexed to inflation. These are the tax brackets that affect higher earners such as professionals, doctors, engineers, entrepreneurs and others that politicians tell us they want to retain and attract to Canada. These excessive tax levels are sure to come under pressure if Trump follows through with his promises to reduce U.S. taxes. 

Meanwhile, on the federal front, another Fraser Institute report shows that Prime Minister Justin Trudeau leaves office with the worst record for economic growth in recent history. Trudeau was highly critical of economic growth in terms of GDP per capita under the Harper government, which had been a relatively weak 0.5 per cent annually. Trudeau thought the answer to increased GDP per capita was more government spending, more borrowing and larger deficits and debt. Looking back on the Trudeau years, the end result was worse than Harper with an annual GDP per capita growth rate of 0.3 per cent, as well as a massive amount of accumulated debt to be paid off in future. 

Fiscal policy is hardly sexy, but does have a big impact on our everyday lives in terms of the very high taxes we pay and the debt we will need to contend with in future. It also affects our economic health as high taxes and large deficits and debt hurt our competitiveness and our ability to attract investment, something that Canada has suffered from greatly in recent years. Despite its boring nature, a little more attention paid to government fiscal prudence by voters would pay off in terms of a healthier economy, lower taxes and a higher standard of living for all Canadians. 

Your donations help us continue to deliver the news and commentary you want to read. Please consider donating today.

Support TNI

Local

  • Politics

  • Sports

  • Business

  • Copy link
    Powered by Social Snap