By Bill Moore-Kilgannon, Parkland Institute

A new study finds that, for most people, the so-called Alberta Advantage is an illusion. The Canadian Centre for Policy Alternatives BC office and the Alberta-based Parkland Institute today jointly released a report entitled "A Tale of Two Provinces: A Comparative Study of Economic and Social Conditions in British Columbia and Alberta," written by Seth Klein and Catherine Walshe.

The study compares BC and Alberta on the basis of a range of economic and social indicators. Going beyond headlines that emphasize Alberta’s recent record of strong economic growth and relatively low unemployment, the report examines what has happened to public services in both provinces, who has benefited from economic growth in Alberta, and identifies the source of Alberta’s recent growth and BC’s recent economic downturn.

"Other than the wealthiest residents, what people save in taxes in Alberta they lose in reduced public services and new out-of-pocket expenses," says Klein, director of the CCPA’s BC office. "Health, education and welfare all receive less public funding in Alberta than in BC. Funding for public programs in Alberta, which at one time was among the highest in Canada, is now at or below levels in the poorest Atlantic provinces. As a result, Albertans now spend more per capita on private health care expenditures, more in post-secondary tuition, and send more to the government in the form of lottery and gambling expenditures."

"It may be easier to find a job in Alberta right now," Klein says. "But overall the benefits of growth in Alberta have been unevenly distributed. The ‘Alberta Advantage’ has not translated into concrete gains for the majority of working people. Their earnings and wages are lower than in BC. More than in any other Canadian province, the Alberta labour market is characterized by gaps; between the income of workers and corporate profits, between hourly-paid workers and salaried workers, and between the earnings of women and men."

A key finding of the study is that both Alberta and BC remain too dependent on the export of primary resource commodities. Alberta, however, is more dependent on the resource sector, and is becoming more so. The study concludes that Alberta’s growth has been export-led, driven by oil and gas exports to the US market. "The Alberta Advantage is not a product of lower taxes and budget surpluses," says Klein. "Rather, Alberta’s growth results from the real Alberta Advantage: oil and gas.

Among the study’s findings:

When all direct taxes are considered – income taxes, property taxes, sales taxes, payroll taxes, etc. – taxes in BC are the second lowest in the country after Alberta for all but the very wealthiest residents.

BC has seen a steady increase in health care spending, and currently ranks first among the provinces with respect to public health care spending per capita. Alberta, in contrast, now ranks last among the provinces in per capita public health expenditures. In 1997, BC was spending $367 more per person on public health care.

BC now spends over $1,100 more per pupil on primary and second education than Alberta.

In 1997-98, average university tuition in BC was almost $800 per year less than in Alberta.

Albertans now send approximately $150 more per capita to government coffers by way of lotteries and gambling than do British Columbians.

By 1997, the natural resource sector represented 9 per cent of BC’s GDP, down from 13 per cent 10 years earlier. In contrast, Alberta’s natural resource sector accounts for a growing share of provincial output, climbing to over 21 per cent of Alberta’s GDP in 1997 from 19.5 per cent in 1987. Alberta is approximately twice as dependent as BC on the resource sector for its government revenues.

Net exports are positive for Alberta. In BC, however, net exports are negative, and thus a drag on growth. Alberta’s international trade surpluses are three times that of BC.

"Our research indicates that Alberta’s recent growth and BC’s economic downturn have little to do with public policies in either provinces," says Klein. "Rather, the economic up and downs experienced by each province reflect international prices and demand for the province’s major commodity exports."

The full study is on the CCPA webpage.