The Alberta government could be seriously underestimating the scale of the province's debt, according to a new report by the Fraser Institute.
Currently, the government is forecasting the province's debt could reach $19.8 billion in five years.
The report released Thursday suggests that number might be a low-ball. The think tank forecasts the actual deficit could range between $26.8 billion and $36 billion, based on different scenarios of government spending.
The report suggests the numbers could be higher, as the study doesn't account for future revenue losses — a plausible situation given the volatility of global oil prices.
"Given economic conditions in the province, if the government fails to restrain spending, the pace of debt accumulation in Alberta may be extremely rapid," said study co-author Ben Eise in a release.
The study, titled "How Much, How Fast? Estimating Debt Accumulation in Alberta Through 2019/20," notes 2016 to be the first time in 17 years where the province's debt will exceed its assets.
In 2007-2008, the province had no net debt and $35 billion in assets. That means if the study's predictions come to fruition, the province will have seen a $71-billion drop in over a decade.
"The pace of debt accumulation in Alberta may be extremely rapid."
The right-leaning think tank doesn't place the blame solely on Premier Rachel Notley's NDP government, instead suggesting "uncontrollable spending" over the last ten years led to the province's financially precarious position.
However, the study's authors do suggest that the upcoming provincial budget, if done right, could soften the blow.
"With the provincial budget only two weeks away, the government's spending choices will play an important role in determining how much debt is laid on the backs of working Albertans and their families," said Eisen.
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EDMONTON — Alberta's NDP government tabled its first budget Tuesday. A look at some of the winners and losers: Files from The Canadian Press
Winners — Low-income families: New Alberta Child Benefit to assist families earning less than $41,220. Parents to get up to $1,100 for one child and as much as $550 each for three additional children. Family Tax Credit to be enhanced so more lower- and middle-class families can get access to it and draw from it for longer periods. Files from The Canadian Press
Winners — Employers and people looking for work: A two-year job incentive program is to give companies of all sizes, as well as non-profits, $5,000 for each new job they create. Meant to support 27,000 new jobs each year. New measures to improve access to capital for small- and medium-sized businesses. Files from The Canadian Press
Losers — Drinkers and smokers: The cost of cigarettes goes up by $5 a carton. A case of 12 beers goes up 24 cents and a bottle of wine is increased by 18 cents. Files from The Canadian Press
Losers — The insured: There is an insurance premium tax hike of one per cent. Files from The Canadian Press
Losers — Politicians: Cabinet ministers, political staff and members of the legislature are to be under a salary freeze for the remainder of the current four-year legislature term. Files from The Canadian Press
Winners — The sick and those in need: More money for services to help children and families in need, including $15 million to support women's shelters. Operational funding for health is to increase to almost $21 billion by 2018. Files from The Canadian Press
Winners — Construction workers: The province plans to spend $34 billion over the next five years to ramp up construction for roads, schools, hospitals and other facilities. Files from The Canadian Press
Winners — Students: There is a two-year tuition freeze for post-secondary students. An additional 380 teachers, plus 150 support staffers, to be hired for grade schools. Files from The Canadian Press
Losers — Future taxpayers: Starting next year, the province plans to begin borrowing for the first time in 20 years to manage its day-to-day spending. Debt for capital is expected to hit $36.6 billion by 2018. Files from The Canadian Press