Danielle Smith’s proposed Alberta sovereignty act ‘dangerous,’ says ATB’s outgoing chief economist
When I ask Alberta economist Todd Hirsch about Danielle Smith and her proposed Alberta sovereignty act, the question seems to cause him physical discomfort.
He was a leading voice on the Alberta economy who, perversely, never commented on provincial budgets. He avoided discussions about the government’s fiscal policy options – about, say, a carbon tax or a provincial sales tax. His concern was that it could be interpreted as political commentary – especially in this volatile era of social media.
“I think this would be so politically confusing and disruptive. Just ask Quebec, after 1976 [when that province first elected a separatist Parti Québécois government], how that went for them. It was 40 years of an outflow of people and capital and corporate presence and influence … and it’s never returned. The same thing would happen in Alberta.”
Mr. Hirsch believes that Alberta is headed for more budget surpluses in the future, as its royalties from oil and gas production stand to increase in the next few years even if commodity prices don’t remain as strong as they are today. That’s because some of the biggest oil-sands projects of the past decade are approaching the point where they will have earned back their large up-front development costs, at which point their royalty rates increase dramatically on all future production.
“We need to continue some dialogue, as Albertans, about how we want to manage our fiscal situation,” he said. “Because just sort of playing it by ear every year we have a budget – it’s like you win the lottery every year, but you’ve got no plan for what to do with those lottery winnings. And then some years, you don’t win the lottery, then you’re in trouble.”
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