Report suggests Alberta should cut back on government employees to pay for rebuilding efforts

In June, the province of Alberta suffered from catastrophic flooding and was the worst in the history of the province. At least four people were killed, more than 100,000 residents were displaced and around 2,200 Canadian Armed Forces soldiers were sent to the region to help out with the flooding.

At the time of the flooding, Premier Alison Redford was running a $5.1 billion budget deficit and she has already warned that the government will be going into debt in order to pay for the recovery. But does the Progressive Conservative leader have to let the costs spiral out of control to fund the rebuilding efforts? A new report says no.

The Canadian Taxpayers Federation (CTF) issued a report Tuesday that warned Alberta’s budget deficit could soar to $7 billion over the next three years, but is urging the provincial government to allocate spending initiatives to the flooding damage.

According to the organization, the government should implement a reallocation package of $4.4 billion. This would mean officials would reduce operating spending by $2.7 billion by cutting the number of government employees and getting rid of subsidies to businesses. “That taken together with extending the two year capital plan from two years to three years will produce $4.4 billion,” said Derek Fildebrandt, Alberta Director for the CTF, in a statement.

Since there isn’t any money left in the rainy day fund, the provincial government has to take these measures. If it does then Alberta will return to a surplus and begin to pay down its enormous debt levels, the CTF argues.

“The Sustainability Fund is caput. There’s practically nothing left in it, it’s been spent or borrowed against to the point where it doesn’t exist,” said Fildebrandt. “We’re projecting that based on the overspending deficit that we had before the flood and with the flood damage taken together, we’re going to be running a $14 B cumulative deficit over the next three years and we’ve got no plan to pay for it.”

In addition, the group recommends Alberta adopt a mandatory flood insurance policy in areas that are at risk.