Alberta auditor general calls for long-term financial forecasts as oil revenue slides
Alberta’s auditor general says a long-term fiscal projection would help the province as it deals with oil price swings and a diminishing non-renewable resource.
In his farewell report, Merwan Saher says enormous oil revenues, such as have been enjoyed by Alberta in the past, can be a double-edged sword.
He says such petroleum windfalls can become easy substitutes for strong economic fundamentals in good times, leading to much bigger problems when the prices crash.
Saher says long-term forecasts looking decades down the road, such as used in Norway, help keep government spending on track as a constant reminder that oil resources will run out and that planning for a post-oil future is critical.
Alberta has been running multibillion-dollar deficits due to a prolonged slump in oil prices.
Saher says Alberta risks not capitalizing on its remaining oil and gas revenue if governments take a short-term view in future planning.
“I have no idea what the (government) plan is going out into the future,” Saher said Thursday.
“I think there’s a tendency generally, we’re human beings, that the future will take care of itself.
“That is incredibly risky for a group of people to rely on.”
Finance Minister Joe Ceci, in a statement, said the report, “reinforces our position that we need to get off the oil and gas roller-coaster. Quality services should not depend on the price of oil.”
Ceci noted the current budget has a six-year plan to erase the budget deficit.
Political opponents, however, have said Ceci’s plan is based on questionable assumptions, including the construction of the Kinder Morgan oil pipeline expansion.
Saher completes his eight-year term as auditor general at the end of the month.
He will be replaced by Doug Wylie, who becomes Alberta’s 11th auditor general.
© 2018 The Canadian Press