The City of Medicine Hat is facing a $23 million gap in its budget after natural gas prices dropped. The city had been using revenues from its gas utility to offset our operational costs and keep our taxes low. Now that this boon is over I have heard some Hatters complain to councillors and city staff asking them why wasn’t anything done sooner to make us less dependent on this revenue. It’s easy to cast blame on councillors and city managers, but that isn’t the whole story.
In early 2015 Premier Jim Prentice was asked who was responsible for Alberta’s current financial woes. He replied, “in terms of who is responsible, we need only look in the mirror.” He was roundly scorned for this comment because it seemed he was dodging responsibility. After all it was his own party and government who had held the reins of power for the past four decades.
No one denies that the PCs and those in power should accept responsibility, but Premier Prentice was absolutely right in another sense. Alberta’s problem was an overreliance on oil royalties supplementing the provincial budget. A problem that became apparent when oil prices crashed. But this was hardly done in secret. For those paying attention it was clear that Alberta’s financial model was unsustainable. Yet most of us, myself included, were happy to ignore the problem while times were good.
Our municipal picture is a microcosm of the provincial one and the same thinking permeated this city. When times were good, our revenues from our gas utility allowed us to have lower property taxes while providing us with services that outstripped what we paid for out of pocket. None of this was hidden from Hatters. After all no one is accusing Medicine Hat city managers or councillors of any mismanagement. The mistake they made, to rely on natural gas revenue to the extent we did, was philosophical. But we, the citizens of Medicine Hat, endorsed this choice in every election over and over for decades. As such we bear responsibility for this choice and its consequences. In a democracy we are the government. The buck stops with us.
There were a small minority of residents who have been calling attention to this issue, but unfortunately it’s human nature to avoid problems and that is what we did. The drop is gas revenues has woken us up and we’re paying attention now. We like to talk about the Alberta advantage and the Medicine Hat advantage, but these advantages were built on a fundamentally unsound premise. The advantage had less to do with better or more efficient government than a steady supply of oil and gas royalties. In short our provincial and municipal advantage was a myth. If we are to create a true Alberta and Medicine Hat advantage it will first require us to look in the mirror and understand that we all must shoulder responsibility for our government’s actions. Politics is a team sport, not a spectator sport. If this renewed attention in our own governance can be sustained then our city and province may emerge stronger.