Alberta must improve its risk management practices to ensure its long-term sustainability
While working at Alberta Treasury Board and Finance (TB&F), I sounded the alarm on the government’s blind spot: its failure to grasp long-term risks associated with emerging policies and regulations at both national and provincial levels. Lacking robust systems for economic, fiscal, and environmental scenario analyses, we were left exposed to potential financial disasters.
Since leaving government at the end of October 2023, I’ve continued to shine a spotlight on these critical issues. I’ve slammed the lack of focus on long-term fiscal sustainability and analysis within the government and the absence of thorough impact assessments for emerging policies and regulations at both national and provincial levels, which jeopardize Alberta’s economic future.
It’s time for the Alberta government to improve its risk management practices to avoid unintended consequences. We can’t afford to be reactive – we need proactive strategies to managing risks if we are to safeguard our fiscal, economic, and environmental well-being.
That’s why I’m heartened by TB&F’s move to seek outside assistance to enhance the development of models, tools, and resource capacity for conducting robust economic, fiscal, and environmental scenario analyses of emerging policies and regulations. Their acknowledgment of the need to bolster our analytical capabilities is a step in the right direction. With an eye on the future, TB&F’s recent Request-for-Proposal (RFP) signals a commitment to meeting the demands for robust scenario analysis and policy development.
The RFP underscores TB&F’s recognition of the mounting analytical demands facing Alberta. It’s a call to action for contractors to help us build the necessary models and capacity to tackle these challenges head-on.
An effective risk management framework is essential to confronting emerging risks to the Alberta economy and government revenues, including:
- federal climate change policies and regulations;
- significant emergencies and disasters, such as increased severity of forest fires and drought conditions;
- demands for increases to public sector compensation;
- an ageing population placing growing pressure on core programs in health care and social services, and
- increasing capital demands (for new infrastructure and maintenance) due to a growing population.
By acknowledging the need for external assistance, TB&F is acknowledging our shortcomings in risk management.
It’s a crucial step, and I wholeheartedly support it.
Lennie Kaplan is a former senior manager in the Fiscal and Economic Policy Division of Alberta’s Ministry of Treasury Board and Finance (TB&F), where, among other duties, he examined best practices in fiscal planning. In 2019, he served as Executive Director to the MacKinnon Report on Alberta’s Finances. He recently retired from his position as Executive Director of Research at the Canadian Energy Centre.
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