Sustainability Fund to be entirely depleted before year-end
CTF recommends mandatory flood insurance & ‘hard-cap’ on flood aid
CALGARY, AB: Today the Canadian Taxpayers Federation (CTF) released its recommendations for rebuilding from the 2013 floods in a report titled, ‘Responsibly Rebuilding Alberta.’ In the report, the CTF estimates the fiscal changes to the province resulting from the flood and makes a series of recommendations for flood aid, and how the province should pay for rebuilding.
The CTF estimates that as a result of the flood, the consolidated deficit for 2013-14 will grow from $5.1 billion to $8.1 billion. Without major corrective action, the CTF estimates that the province will run a cumulative deficit of $14 billion over the next three years.
“We were already staring down the barrel of a $5.1 billion deficit before the flood. The flood didn’t create the mess we’re in, but exacerbated an already perilous situation,” said CTF Alberta Director and report author Derek Fildebrandt.
The CTF’s report also calls for mandatory flood insurance for property owners who have made disaster relief claims.
“When we surveyed our supports, they were very clear that they were willing to open their wallets for one-time flood relief, but that there needs to be clear protections for taxpayers and property owners in the future. Making flood insurance mandatory for those who have claimed disaster assistance in the past will achieve that” continued Fildebrandt.
The CTF also calculated that based on pre-flood spending plans that the Sustainability Fund would be entirely depleted or borrowed against before the end of the fiscal year. The Sustainability Fund had $16.8 billion in it at the beginning of fiscal year 2009-10.
“We wasted our rainy day fund – the Sustainability Fund – during good and fair weather days,” said Fildebrandt. “The province’s inability to control spending before the flood has left us in a position where there is nothing left in the kitty now that we really need it.”
In its report, the CTF laid out a detailed fiscal plan to reallocate $4.4 billion in annual spending away from pre-flood commitments in order to pay for rebuilding. This would be accomplished by reallocating $2.7 billion in operating spending and extending the 2014-15 and 2015-16 Capital Plan over three years.
“The CTF’s plan to rebuild responsibly is built on the premise that we cannot allow a natural disaster to become a fiscal disaster,” said Fildebrandt. “Our fiscal plan is about setting priorities between the ‘nice-to-have’ and the ‘need to have.’”
To read the full report, click here:
Derek Fildebrandt, Alberta Director
