EDMONTON, Feb. 9 /CNW/ - CGA Alberta is calling on the Alberta Government to adopt a long term economic approach as it works its way out of deficit budgets.
"Our budgeting system itself does not lend itself to sustainable, long-term fiscal discipline and allows dollars to flow generously during the high side of the hydro-carbon price cycle," said John Carpenter, MBA, FCGA and CEO of CGA Alberta. "Alberta's volatile resources will not allow us to plan spending with any sort of long-term perspective unless a structure is created to accommodate that perspective."
Currently, wealth acquired from volatile resources is quickly consumed by the political process, a symptom of the willingness to 'spend it all' when the high side of the resource cycle fills the provincial coffers. "This leads to high risk budgeting decisions and an inability to plan for the long term," said Carpenter.
Carpenter envisions a defined fiscal infrastructure, enshrined in legislation, to ensure money for long-term needs is taken off the table when surplus resources flow back into Alberta's revenues. "Long term, demographically-sensitive programs (like health care) need to be properly costed in the future and funded in an actuarially sound manner," said Carpenter. "The time to build fiscal frameworks which will capture such surpluses for popular and prescribed programs is now, when there will be no actual cash cost."
"Policy communication needs to be enhanced and supplemented with an effort to improve the financial literacy of voters and political leaders," said Carpenter. "It's no one's fault this framework is not at the centre of our fiscal communications. But it needs to be, and that need should be met by the shared efforts of government, media and those studying these matters. The resulting vision must be communicated to Albertans so they understand the intent, the plan, and the stewardship accounting presented by governments."
In addition to enhancing the budget system to deal with Alberta's economic roller-coaster, Carpenter recommends the Alberta Government focus on new energy research and the commercialization of research.
"Resources must be set aside to leverage Alberta's hydrocarbon economy to an 'energy economy,' and research focused on horizontal and or vertical diversification of that sort should be supported by careful government funding in universities and research facilities," said Carpenter. "The reality is that investments are flowing to alternatives. They will eventually become competitive substitutes for our hydro-carbon based energy supplies," said Carpenter.
Alberta has developed unique approaches to funding the energy business with its own institutions, and the result has been a westward shift in capital markets within the country. The byproduct of this focus has been the development of an Alberta finance industry. As the federal government has determined it will move ahead with a national single securities regulator, Carpenter warns moving the regulation of that industry eastward will harm the businesses that rely on local finance expertise. "We know the financial centre of Canada has moved westward. With a national single regulator in place, we risk being relegated back to simple suppliers of raw natural resources to other areas of the country who will develop and make money from those resources," said Carpenter.
Carpenter supports the province's effort to oppose creation of a single regulator. "We have a system in place to deal with the issues the federal government wants addressed. It's called the Passport System. Its design has evolved steadily in Canada, and only one province is missing. I am not sure why the federal government insists the system does not work because one province will not participate."
The Certified General Accountants' Association is responsible for the education, regulation and promotion of CGAs in Alberta. There are more than 73,000 CGA members and students working across the country and around the world, at every level and in every sector. CGA is the fastest growing accounting designation in Canada and is the designation of choice for students pursuing an accounting career in Alberta. For more information about CGA Alberta, please visit the web-site at www.cga-alberta.org
SOURCE Alberta Accountants Unification Agency
For further information: For further information: on John Carpenter, go to www.cga-alberta.org - News and Media/CEO bio; For more information or to arrange an interview, please contact: Janice Harrington, Vice President, Communications and Government Relations, (403) 614-7941