Does Alberta Have a Spending Problem?

Alberta spent the better part of the last decade of the 20th century becoming the paragon of fiscal virtue. Following a 1993 election fought over the nature of Alberta's spending, the Alberta government set the standard for having a clean and closely controlled fiscal framework by vigorously reducing its expenditures. And it reaped the rewards by paying down its debt and making tax cuts that enhanced critical productivity, including the move to a single rate of personal income tax.The recent return to deficits in Alberta has raised the question of whether the province has a spending problem. The answer to this question has important implications for how the province addresses its deficit. If Alberta has a spending problem, it makes sense to focus on expenditure reductions to reduce the deficit. If not, then relying on economic growth or tax increases might be the appropriate response