Gage Haubrich is the Prairie Director and Kris Sims is the Alberta Director for the Canadian Taxpayers FederationEvery student knows even one bad class can pull down a grade point average like an anchor.The Canadian Taxpayers Federation has just released report cards for all provincial finance ministers across the country. Finance ministers were graded on their spending, debt, interest charges and tax relief in the latest provincial budgets.While Saskatchewan and Alberta are at the top of the class in this year’s Finance Minister Report Card, both provinces still have a lot of work to do for their taxpayers..As a class, Canada’s finance ministers aren’t doing great. No finance minister received an A on their report card because all provinces are borrowing more money this year, saddling taxpayers with deeper debt.Saskatchewan Finance Minister Jim Reiter performed the best this year, earning a B+ grade. Alberta Finance Minister Nate Horner came in second, earning a B.The ministers earned high marks because they both delivered real tax relief. In Saskatchewan, the government cut income taxes, saving a family of four about $2,100 over four years. It also permanently cut the small business tax rate in half.Alberta also cut income taxes. Horner’s provincial tax cut will save a two-person working family about $1,500 per year, according to the government.Those are very good moves..Unfortunately, the provinces are failing to curb spending and stop borrowing money on the backs of taxpayers.Saskatchewan had the lowest spending increase of any province this year at 4.5 per cent. However, it’s still spending more in 11 out of 12 government-run departments. It’s even spending $61 million more on what the province calls “general government.”Alberta, on the other hand, is spending about 8.4 per cent more this year. That’s the second-highest increase in the country and almost double Saskatchewan’s hike.In fact, Alberta is just barely staying within its new spending laws, which say the government cannot increase spending beyond the rate of inflation plus population growth from the year prior.And because of all this spending, both provinces are racking up more debt..Saskatchewan is increasing its debt by about $2.4 billion this year compared to last year’s budget. Interest payments on the debt will cost taxpayers $878.4 million this year — about $705 per person.Alberta is borrowing at least $5.2 billion more this year. The government has no plans to stop borrowing for at least two years. Debt interest payments will cost taxpayers $2.9 billion — or about $598 per Albertan.Those costs are lower than other provinces, but both Reiter and Horner shouldn’t be slacking off just because everyone else in the class is busy shooting spitballs and passing notes..Increasing debt puts much-needed tax cuts at risk. When a government wastes more money on interest payments, it starts looking to hike taxes to keep spending.That’s exactly what happened in Saskatchewan in the 1990s. The government increased its debt to the highest level in the country, and couldn’t afford its interest payments. Then came tax hikes: on gas, on the provincial sales tax, and on business.Tax relief is great, and it makes life more affordable for taxpayers. But it can’t be counted on if governments don’t also reduce spending and pay down debt.Both Alberta and Saskatchewan are doing well compared to their neighbours — but they need to hit the books. That means reining in spending and stopping the debt from piling up if they want to earn an A grade from taxpayers.Gage Haubrich is the Prairie Director and Kris Sims is the Alberta Director for the Canadian Taxpayers Federation.
