Alberta Premier Rachel Notley should emulate her party’s fiscal prudence in Saskatchewan in the 1990s rather than high-spending in Ontario, the Fraser Institute said.
Roy Romanow, the New Democratic Party premier of Saskatchewan from 1991 to 2001, implemented spending cuts and tax increases to eliminate a C$845 million ($688 million) budget deficit in three years. Ontario, under NDP Premier Bob Rae, tried to spend its way out of an economic downturn, leading to deficits of more than C$9 billion each fiscal year from 1992 to 1995, the public policy think tank wrote in a report published Monday.
The NDP won elections in oil-rich Alberta last month as the provincial economy has sagged since the collapse of crude prices, with a C$5 billion deficit projected for the current fiscal year. Notley is increasing corporate and personal income taxes as she seeks to offset lost revenue from oil royalties, while boosting spending on health care and education.
The Standard & Poor’s/TSX Energy Index has dropped 11 percent from a five-month high on April 23, amid uncertainty over other NDP policies including a new royalty regime. Pipeline operator Enbridge Inc., which has the highest weighting on the index, declined 10 percent during that period.
Each province’s NDP is independent from each other and from their federal counterpart.