[Flash Walken]

Originally Posted by Regorium

Yes, but he also promised cutbacks in spending. Notley kept all of Prentice's tax increases, and also increased spending at the same time.

I think a lot of us would be okay with tax increases if the government also showed restraint in spending. Right now, with Notley's tax increases, it literally feels like it's going straight from my pocket, to some teacher/nurse/bureaucrat's pocket.

And frankly, depending on how public union contract negotiations look, it seems like more and more of my money will go straight to public sector salaries.

But why is it a foregone conclusion that increasing spending during an economic downturn is always a bad decision?

When the private sector is laying off tens of thousands of employees I don't think it's prudent for the other major employer in the province, government, to do the same, and there are studied economists who feel the same way. Further to this point, it's not just engineers in office buildings in Calgary being layed off, the construction industry in the province is in the toilet. That's an industry where public investment in infrastructure can actually make a tangible difference in the economic fortunes of communities all over the province.

University of Calgary economist Trevor Tombe said he thinks the numbers are “optimistic” but not necessarily unreasonable.

While he has some skepticism toward the GDP modelling, Tombe notes it is similar to assumptions used by both the current Liberal and former Conservative federal governments, as well as the Bank of Canada.

Job estimates have even more uncertainty, he said.

“Specific job creation estimates resulting from new government spending are difficult to make and it is still an active area of research,” said Tombe in an email.

“While the government’s job creation estimates aren’t obviously wrong, there is a large error band around such estimates. We should interpret them with caution.”

Ron Kneebone, director of economic and social policy at the U of C’s School of Public Policy, also said the numbers are hard to evaluate but that they don’t seem unreasonable.

But Kneebone said that while the government is following a common path of boosting spending to deal with a temporary recession, the current downturn may not be short-term unless there is a prolonged, significant turnaround in oil prices.

That makes current overall spending levels and ongoing deficits a concern, with debt a growing issue in the coming years, said Kneebone in an email.

The NDP, like the PCs before them, are borrowing extensively to fund the infrastructure spree, with the provincial debt forecast to reach $57.6 billion by 2019.

The government is buttressed in its approach by a report it commissioned from David Dodge last year, with the former Bank of Canada governor arguing that low interest rates and lower construction costs due to the stagnant economy make this the right time both to borrow and spend on capital.

The total tab for public sector infrastructure for this year actually comes to nearly $8.5 billion, including $858 million in self-financed investment in the schools, university, colleges and hospital (SUCH) sector.

The government says that at the end of June of 2016, there were 133 school projects, 15 health facilities and eight post-secondary projects under construction while more than 400 transportation projects were in the planning engineering or construction phase.

The equivalent numbers from a year earlier were 77 schools, nine health facilities, four post-secondary projects and 360 transportation projects.

But Paul Verhesen, president of the Alberta Construction Association, said the vast majority of projects being worked on this year were launched by the former PC government, so the impact of the NDP’s spending is difficult to gauge and there are questions whether the new money is getting out the door.

Verhesen said the industry is grateful for the NDP commitment on capital.

But he said it is a “drop in the bucket” compared to the activity the industry has lost because of the downturn — activity that will only return with stronger oil prices and renewed confidence in the economy.

“Oilsands, private development, those have all dried up and we’ll come to a grinding halt and the only thing that’s out there is government infrastructure projects,” said Verhesen, president of Edmonton-based Clark Builders.

“I’m not condemning or suggesting this government isn’t doing what it can. I’m suggesting there is a bigger issue at play here.”

The drop-off in construction in Alberta has been steep, according to capital and repair expenditures tracked by Statistics Canada. While the province is still first in private sector investment, at an estimated $55 billion this year, that’s down from $66 billion in 2015 and a whopping $90 billion in 2014.

Meanwhile, from July 2015 to July 2016, overall construction jobs dropped by 11,000, part of a 49,000 decline in jobs in Alberta over that period.

http://calgaryherald.com/news/politi...cture-spending