Alberta's resource-based economy is on fire, no question there. After peaking above U.S. $75 per barrel in July, oil is hovering at $65 for the forseeable future. Profits are rolling in and the projected $4.1 billion budget surplus for 2006/2007 is almost three times last year's record setting projection. Government spending is up too. With this year's expenditures topping $28 billion, the government has loosened the purse strings like never before, including a 28 per cent increase in post-secondary base operating funds over three years.
We're clearly all blessed to be living in the land of milk and honey, except when we're not. At the risk of pointing out the obvious, Alberta's ongoing boom isn't benefitting everybody. Small--and even large--business owners, the working poor and students are all facing unprecedented new challenges thanks to economic prosperity.
Businesses--including the Chartwells-operated Pizza Pizza on campus--are being forced to shut their doors or go out of business altogether because of worker shortages. The demand for retail and service-sector employees is driving up wages in order to attract workers, but costs are following close behind. Even the Students' Union-operated Den and Black Lounge are raising prices, at least in part to cover salary increases. And if the giant advertisement hanging outside the Black Lounge is any indication, they too are hurting for qualified staff.
The housing crisis is driving living costs up all over the province, especially in Fort McMurray and Calgary. Rent increases on existing rentals and demand from professional workers pouring in to capitalize on Calgary's scorching job market are squeezing low-income renters--including students--out of the marketplace.
The current boom is affecting everything from skyrocketing building costs to property insurance rates to the cost of public transit as new demands strain existing infrastructure. Healthcare is a wreck too, with dangerously long wait-times and overworked staff.
It comes as little solace then that Premier Ralph Klein used his last day in legislature to tearfully admit his government didn't predict the level of growth Alberta now faces. His record alone was evidence of that, as the Conservatives spent the lean times of the '90s slashing education and healthcare spending and tearing down hospitals to help balance the books. Now the books are balanced, but the repercussions from massive cuts to Alberta's services are still being felt, despite record spending.
Alberta has faced a boom before, and Calgary's oil executives can probably still remember with a shudder the ensuing bust. Though the situation is definitely different than the culmination of factors that resulted in the economic crash of the early 1980s, the idea that our current prosperity can last forever is absurd. Yet, with spending priorities rooted only in the current market-trend forecast, long-term and sustainable planning is still embarrassingly unheard of in Alberta. As long as we continue to cut spending when our resource revenues are low, and then try to play catch-up when they rise, Alberta is doomed to perpetually fall short of our potential as a national leader. And as long as our social spending is based on the ups and downs of the free market, the quality of life for many Albertans will be similarly uncertain.